Entry into the labor force widens the circle of social relationships. For many adults, these contacts are important sources of friendships and resources. For men especially, the workplace is the focus of their social world. Many both in and outside of Japan share an image of the Japanese workplace that is based on a lifetime-employment model used by large companies. These employment practices came about as the result of labor shortages in the 1920s, when companies competed to recruit and retain the best workers by offering better benefits and job security. By the 1960s, employment at a large prestigious company had become the goal of children of the new middle class, the pursuit of which required mobilization of family resources and great individual perseverance in order to achieve success in the fiercely competitive education system.

Lifetime employment refers not to a worker's lifetime but to the time from school graduation until mandatory retirement, at age sixty for most men. Workers are recruited directly out of school, and large investments are made in training. Employees are expected to work hard and demonstrate loyalty to the firm, in exchange for some degree of job security and benefits, such as housing subsidies, good insurance, the use of recreational facilities, and bonuses and pensions. Wages begin low, but seniority is rewarded, with promotions based on a combination of seniority and ability. Leadership is not based on assertiveness or quick decision making but on the ability to create consensus, taking into account the needs of subordinates. Surveys indicate continued preference for bosses who are demanding but show concern for workers' private lives over less-demanding bosses interested only in performance on the job. This system rewards behavior demonstrating identification with the team effort, indicated by singing the company song, not taking all of one's vacation days, and sharing credit for accomplishments with the work group. Pride in one's work is expressed through competition with other parallel sections in the company and between one's company and other companies in similar lines of business. Thus, individuals are motivated to maintain wa (harmony) and participate in group activities, not only on the job but also in after-hours socializing. The image of group loyalty, however, may be more a matter of ideology than practice, especially for people who do not make it to the top.

Every worker does not, however, enjoy the benefits of such employment practices and work environments. Although 64 percent of households in 1985 depended on wages or salaries for most of their income, most of these workers were employed by small and mediumsized firms that could not afford the benefits or achieve the successes of the large companies, despite the best intentions of owners. Even in the large corporations, distinctions between permanent and temporary employees made many workers, often women, ineligible for benefits and promotions. These workers were also the first to be laid off in difficult business conditions. Japan scholar Dorinne K. Kondo compares the status of permanent and temporary workers with Bachnik's distinctions between permanent and temporary members of an ie, creating degrees of inside and outside within a firm. Traditions of entrepreneurship and of inheritance of the means of livelihood continued among merchants, artisans, farmers, and fishermen, still nearly 20 percent of the work force in 1985. These workers gave up security for autonomy and, when economically necessary, supplemented household income with wage employment. Traditionally, such businesses use unpaid family labor, but wives or even husbands are likely to go off to work in factories or offices and leave spouses or retired parents to work the farm or mind the shop. On the one hand, policies of decentralization provide factory jobs locally for families that farm part time; on the other hand, unemployment created by deindustrialization affects rural as well as urban workers. Whereas unemployment is low in Japan compared with other industrialized nations (less than 3 percent through the late 1980s), an estimated 400,000 day laborers share none of the security or affluence enjoyed by those employees with lifetime-employment benefits.

Although Japanese workers are known worldwide for their hard work and dedication to their firms, more than 50 percent of respondents of a 1988 government survey said that they would rather have more free time than increased income. The proportion preferring free time to increased income was greater among professionals, supervisors, and white-collar workers. There was also evidence of increased interfirm mobility among some types of workers in the late 1980s, as a result of a labor shortage and changing attitudes toward work among young people.

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