I would say that the only employees who actually cite the overtime provisions of the Labor Standards Act are people who the company would like to fire, if it could.

As far as the overtime exemption goes: If it were set at the 9 million yen level, this would put Japan in line with other OECD nations. The spirit of this law is to spare corporations the burden of having to pay overtime to top executives, who often put in 50-60 hours a week and would be hurting the bottom line if they had to paid overtime. This is especially true at startups, which the government is at least giving lip service to supporting. Of course, executives at that level often get bonused at apposite levels, which renders the overtime unnecessary.

That said, I agree with you that if the law were to come in at the 4 million yen level that it would be an affront to the white collar workers in the 28 year old and above range, who are starting to move out of the bottom rung of ‘analyst’ position down in Toranomon. And so on…(ok, I read more, as you point out, it seems as though the law as stand would be applied in Japan in a way that would not exactly be to the benefit of workers…not much of a surprise.)

But, what I really wanted to get at. Thanks for bringing up the Pesek article. I talked about that article a bit on the Japan Economy News blog. I do agree with you assessment of what he has to say: it’s grim, because if it’s true, it’s doubtful that factors will sway towards something that workers find beneficial.

However, I don’t find his assessment to be an adequate blanket explanation. Certainly, it is true at some firms, but one has to wonder if it is merely tatemae, or a convenient explanation for simply holding wages back. Let’s face it: many companies, and many that are not globally known, have just finished the painful process of restructuring, and increasing pay packets is dangerous when they cite a possible downturn in the US economy as their greatest threat.

At the same time, we will recall that corporate bonuses reached an all-time high in the last cycle, which shows that some cash is in fact flowing back to workers’ pockets. We should also note that only seishain (salaried workers) will receive these bonuses and that they make up a smaller percentage of the overall workforce versus ten years ago. Companies are going with more and more outsourcing and cheaper keiyakushain (contract or part-time workers), who are cheaper than their seishain counterparts. Of course, they feel less loyalty to the kaisha.

The big test will be to see how the retiring group of baby boomers are replaced in the coming five years. Will companies hire seishain to take over for them, or will they continue to trim cost in HR?

Low interest rates may be a bad thing for savings growth but they also mean that mortgages are not quite so bruising.

Let’s also not forget that while wages in Japan dropped, there was also a general deflation – things became a lot cheaper. Chinese production has also opened up a variety of avenues for cheap good for Japanese consumers – 100 yen shops like the ones that we see now would have been a dream during the bubble.

I think that things have gotten qualitatively better for Japanese consumers over the past decade.