Anxious Japanese Are Working Themselves to Death

With Japan's export-based economy showing signs of recovery, many of the data coming out of Tokyo lately are positive. Most economists expect Japan's gross domestic product, which plunged faster than that of Europe or the U.S. after the collapse of Lehman Brothers last fall, to return to growth during the current quarter, while the Nikkei 225 stock index has increased more than one-third since touching two-decade lows in March.

Yet for all the green shoots of recovery, new data released by the Health, Labor & Welfare Ministry on June 8 once again highlight the heavy burden felt by Japan's hard-pressed workers. According to the ministry, for the financial year ended March 2009, a record number of workers suffering from job-induced mental disorders successfully filed for compensation. In total, 269 out of 927 applicants won compensation, up one from the previous year. Among them, 66 had attempted suicide, the second-highest number on record. Grimmer still, the deaths of 158 workers were attributed to karoshi—the Japanese word for working to death—a rise of 16 from a year earlier.

The problem is probably much worse, according to experts who say most instances of extreme workplace stress go unreported. "There are many cases where people give up claims," says Hiroshi Kawahito, a lawyer who specializes in cases of death through overwork. Meanwhile, it's likely that many more of the 30,000 cases of suicide in Japan each year are at least in some way related to a culture of excessive working.

Substantial Unemployment

A further concern is that the figures don't take a full account of the current downturn. While Japan's economic plunge started in earnest after the "Lehman shock" in September, it wasn't until the end of the year that many companies began laying off workers in substantial numbers. Even as the economic outlook improves, few believe the unemployment rate, which hit 5% for the first time in 5½ years in May, has peaked.

Despite some genuine efforts by some companies to improve conditions, it's hard to see the lot of workers easing soon. For sure, there are some positive developments. Toyota (TM), for example, now generally limits overtime to 360 hours a year (an average of 30 hours monthly), and at some offices it makes public address announcements every hour after 7 p.m. pointing out the importance of rest and urging workers to go home. What's more, one feature of the recession is that companies, unwilling to pay overtime, are encouraging workers to leave on time and take longer vacations. During the recent Golden Week holidays in May, for instance, many manufacturers closed plants for longer than usual, encouraging people to take holidays.

Still, the recession also creates new problems for workers. At companies that have laid off employees, many are now doing the jobs of former colleagues in addition to their existing duties. Others, fearing for their jobs, will stay long into the evening for fear of looking expendable. "There may be some companies which let the employees leave early, but they are not among the mainstream of Japanese work sites," adds Kawahito.

A further factor is the impact of what Japanese media call the "wage-down shock"—cuts to worker salaries to offset slumping profits, adding the pressures of financial worries to job insecurity and an excessive workload. While the figures vary from one company to another, many manufacturing workers have taken wage cuts. They've also suffered sharply reduced bonuses, which are a large proportion of pay at many Japanese manufacturers. Meanwhile, enforced holidays, such as those during Golden Week, often include workers using paid vacation or receiving significantly less than their normal daily wage. At recession-hit parts maker Denso, for instance, one worker grumbles that overtime cuts and furloughs have cost some employees $1,000 a month out of pocket. "The mood has become somber," he says.

Culture of Hard Work

For all that, it will take more than an improved economy to alleviate the underlying reasons for Japan's growing army of stressed workers. Many attribute Japan's high suicide rate—which topped 30,000 in 2008 for the 11th consecutive year, more than double the U.S. rate—and increasing number of mental illnesses among workers to restructuring carried out during Japan's "lost decade" in the 1990s. But as the economy recovered, and grew steadily between 2001 and 2007, leaner companies put more pressure on workers, while wages failed to keep pace with rising corporate profits.

For sure, the culture of hard work, even when it risks worker health, runs deep. One government survey found that nearly 90% of workers say they didn't even know what the term work-life balance meant. And 4 out of 5 say they would cancel a date if asked by a superior to work overtime, according to a poll by the Japan Productivity Center for Social-Economic Development, a Tokyo think tank.

Analysts say young people facing an uncertain economic future feel compelled to work longer and longer hours, even if it puts their health at risk. Ominously, Shigeki Matsuda, senior director at the Dai-Ichi Life Research Institute in Tokyo, even links those fears to another one of Japan's problems: its low birthrate. "Uncertainty over the economy and employment has lowered people's motivation for marriage and having children more than expected," he says.

Before it's here, it's on the Bloomberg Terminal.