Departments
Intermediate Japanese - Free Online Course
SHŪSHIN KOYŌ-SEI
終身雇用制
the lifetime employment system
Japanese companies began offering lifetime employment to workers early in the postwar era. This was a time of great instability in Japan; the shūshin koyō-sei was developed against a background of labor unrest, and radical leftwing agitation.
Under the conventions of the shūshin koyō-sei, employers maintained payrolls even when they entered periods of slack demand for their goods and services. From the workers’ perspective, the benefits were obvious. Unlike their counterparts in most of the capitalist world, Japanese workers did not have to worry about losing their jobs due to cyclical economic fluctuations.
From the company’s perspective, the promise of lifetime employment gave the workers a strong sense of corporate loyalty. They would work long hours for relatively low pay. Moreover, Japanese workers developed a high level of skill, because they remained in the same jobs for many years.
The foundations of the shūshin koyō-sei were shaken in the 1990s, when Japan’s so-called "bubble economy" burst. Companies were forced to lay off large numbers of workers for the first time since World War II. The lifetime employment system of the postwar era suddenly seemed to be a thing of the past.
Some economists and business leaders in Japan are now openly challenging the future viability of the shūshin koyō-sei. In this new age of globalization, they argue, Japanese companies must compete with low-cost producers from China, India, Vietnam, and elsewhere. This means that companies must be more flexible than they were in the past, and free to adjust employment levels in response to market forces.