The world’s third-largest economy is being held back by an unusual source and it is has nothing to do with economics.
A recent study by the government shows that apart from making people grumpy and unhealthy, sleep deprivation is doing more harm in Japan and that is related to the economics of the country that is still struggling to achieve sustained growth and scrambling with restrained inflation.
And in the recent years, the problem has been getting worse. According to a government white paper on “karoshi”– death from overwork, nearly half of full-time workers say they don’t get enough sleep due to reasons related to long overtime hours which has been identified as a primary reason.
Junko Sakuyama, economist at Dai-Ichi Life Research Institute in Tokyo says that an unforgiving work culture that includes abundant overtime is largely responsible for this new and fast developing phenomenon.
“There’s an atmosphere at work that you have to work long hours and you shouldn’t leave the office on time, resulting in a lack of sleep and making it difficult for workers to keep up productivity,” Sakuyama said.
However this problem has been recognised by some companies. By specifying the number of hours a worker must take off before returning to work or creating or bolstering “minimum rest” requirements, are some of the actions that are being taken. For example, in December, the nine-hour minimum to all employees, including contract staff, was implemented and extended by Sumitomo Mitsui Trust Bank. Diaper maker Unicharm Corp. now prevents workers from staying later than 10 p.m. and requires at least eight hours of time off and this has been implemented since January.
Japan has no laws governing minimum rest periods unlike the European Union, which mandates 11 consecutive hours of downtime in every 24 hours. According to a white paper released in October, minimum daily rest periods policies are used by only 2 percent of about 1,700 companies surveyed by the government.
For an incentive program to encourage small and medium-sized companies to adopt minimum rest periods, the Japanese government has set aside about 400 million yen ($3.5 million) for the next fiscal year. According to the labor ministry, including measures like revising employment rules, training and updating software that manage work data, a subsidy of up to 500,000 yen will be available per company to help pay the costs.
According to a five-nation study by RAND Europe, a subsidiary of the research group RAND Corp, sleep deprivation is costing Japan more than its G-7 peers while a number of factors are to blame for Japan’s poor productivity per worker. The study found that up to $138 billion a year on Japan’s economy, or about 2.9 percent of gross domestic product is impacted by lack of sleep.
The report further estimates that $75.7 billion could be added to the Japanese economy by simply increasing nightly sleep from under six hours to between six and seven hours.
“Long working hours are a crucial problem in Japan’s labor market,” Sakuyama said. Japan must alleviate overwork to reduce the number of people who work themselves into early graves, as well as to raise productivity as the population shrinks, she said.
(Adapted from Bloomberg)