TT-399 -- Trainees or slaves? ebiz news from Japan

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A weekly roundup of news & information from Terrie Lloyd.

General Edition Sunday, November 12, 2006 Issue No. 399


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- News
- Candidate roundup/Vacancies
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Earlier on this month, the Yomiuri newspaper carried an
article about an auto parts manufacturer in Akitakata,
Hiroshima, which is being investigated for hiring more
foreign "trainees" than allowed by the rules. The company
apparently padded the number of its regular employees, so
that it could bring on an additional 3 Chinese trainees
to add to the 3 already working there. The company had
discovered that not only were the trainees able to do the
same work as locals, they are more than 50% cheaper.

While this case may not seem like such a big deal, it is
the tip of a pretty ugly iceberg. The government's foreign
trainee program, which started with the grand design of
helping to lift the basic skills of Japan's neighbors, now
appears to have degenerated into being little more than a
pipeline of low-cost laborers to keep struggling small
manufacturers and farmers going.

The trainees work/train under near-slavery conditions and
the fall-out from this seems to be increasing. Last year
alone, 1,888 of them ran away from their postings, many
going on to become illegal workers elsewhere in the
country. Broken down by nationality, they numbered 3,516
Chinese, 2,629 Vietnamese, and 1,498 Indonesians -- pretty
much the same ratios as the nationalities being brought in
under the program.

There are about 83,000 trainees accepted into Japan each
year, about 160,000 in total, of which just over 70%
(55,000 annually) are from China. They are allowed to work
(ummm, sorry, "train") in 62 different types of industry,
such as agriculture, food processing, construction,
apparel, and animal husbandry.

The numbers in agriculture are a particular eye-opener and
foretell labor trends in this country. Young Japanese
really don't want to work the land and thus there are now
about 9,000 foreign trainees bolstering the sector,
compared with just 2,200 Japanese high school graduates.
That means there is a 4:1 likelihood that next time you
want to buy a daikon or eggs directly from the farm, you'd
better be able to speak Mandarin.

[Continued below...]

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[...Article continues]

The trainee system has been turned into a form of legalized
"slavery". Most trainees for the duration of their 3 years
have virtually no employment rights (they are, after all
supposed to be trainees not employees) and are paid
unbelievably low compensation -- just JPY66,000 (average) a
month plus accomodation in the first year, and a more
luxurious JPY118,000 (average) or so for the following two
years. Could you survive on this? We'd have problems...

The treatment some of these trainees are receiving is
pretty shocking. The "Association Tokushima", a group
assisting Chinese laborers with problems in Japan, says
that they have documented a case of a 27-year old female
trainee working for a Tokushima-based food processing
plant, who received just JPY70,000/month for working 8
hours a day, 6 days a week, and an overtime allowance of
just JPY300/hour. Apparently she was working 14 hours a
day, then moon-lighting doing farm work on Sundays.

In another case, covered in the Asahi Shimbun back in
August, a Chinese female trainee arrived in Japan to learn
how to grow spinach and strawberries. But somehow she wound
up in a Forestry company. While there, she was required to
clean the company president's home and even polish his
shoes. During her first year, in 2004, she received an
allowance of JPY50,000/month and JPY300/hour for overtime.

After she "graduated" from her first year and become a
so-called documented worker, her salary was supposedly
lifted to JPY112,000/month plus overtime. But in reality
the company deducted JPY90,000/month for rent, futon lease
(really!), washing machine lease, etc. To top it all off,
one of her managers had her apartment key and about 4
months into her traineeship started visiting and demanding
sexual services.

Conditions like these came to the notice of the press in
August, when a Chinese trainee at a pig farm in Chiba
complained about the harsh work conditions and was told
that his traineeship would be terminated. This of course
meant that he would be banished back to China -- trainees
seldom get an extension unless the sponsoring company wants
them. In despair, he went berserk and stabbed 3 people,
including an official of the Chiba Agricultural
Association, the very organization that had brought him to
Japan in the first place. The official died. Since then,
the Ministry of Agriculture and other trainee
program-related ministries have started to review means of
enforcing the rules of the program that are supposed to
protect the trainees from these types of abuses.

According to the Ministry of Health, Labor and Welfare,
companies accepting foreign trainees and workers are mostly
small-scale businesses with less than 19 employees. There
were more than 180 documented cases of fraud or
mistreatment last year (2005) and it is suspected that a
lot more cases go unreported. In fact a Ministry of Health
survey found that of 731 reviewed companies, a full 80% of
them were violating the minimum wage law and labor
standards law for their 2nd- and 3rd-year trainees.
Obviously the problem is severe enough that the Ministry is
allocating JPY400m (US$3.38m) to its quango looking after
the placement of trainees, JITCO, for the purpose of
monitoring participating companies to make sure that they
stay compliant with the trainee program rules.

With the falling birth rate and migration of the domestic
workforce out of hard labor jobs, Japan clearly has to turn
to foreign workers to keep things going. The government
knows this and is infact planning to expand the trainee
system. Among the proposals are to increase the number of
trainees a company can employ from just one for every 20
staff, to an unlimited number, and to increase the variety
of jobs that a trainee can fill. Some employer
organizations are even calling for rule changes to make it
legal to bring in unskilled foreign workers in the same way
that they can already do with skilled ones.

But the expansion can't go ahead until someone takes
responsibility for properly protecting the welfare of the
trainees. Although JITCO is being assigned this role, with
the increased number of inspectors, in fact, given that
they are a major player (they account for about 60% of
trainees) in sourcing and matching the trainees, and so it
seems like the current problems are in fact JITCO's to solve.

Instead, we feel that the government should legislate to
keep traineeships to just one year and make sure that
classes from a local education institution -- which need
new students -- are incorporated. Once trained, graduates
should be allowed to become regular workers and enjoy the
benefits of a minimum salary, labor rights, and the ability
to get their visas renewed. Those that don't pass their
first year should be sent home.

Already a step in the right direction is being taken, in
the way that semi-skilled Filippino health care workers are
to be handled. If they pass their language tests and gain
a solid record during their training period they will be
allowed to stay and work in Japan indefinitely.

Lastly, we couldn't go past sharing news from the BBC that
scientists in the UK have been able to restore sight to
blind mice by transplanting rod cells from mice fetuses
into the eyes of blind adult mice. The results were
apparently "stunning" and offer great hope for humans.
One can only hope that the breakthrough can be replicated
and turned into actual research in centers around the world
as quickly as possible.

For other worthy content in this issue: take a look at the
Blue's Clues comment in our FEEDBACK section below.
Response submitted by Rochelle Kopp, Managing Principal of
Japan Intercultural Consulting. It's pretty funny.

...The information janitors/


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+++ NEWS

- Tax depreciation rules to change
- Tax revenues jump
- MySpace coming to Japan
- Google print ad service
- Aussie milk supply may dry up

-> Tax depreciation rules to change

The government's new Tax Panel Czar, Masaaki Honma, has
indicated that the Panel will look at changing the plant
and equipment depreciation rules for companies. He
commented that the rules haven't changed since the 1960s
and that the panel wants Japanese companies to have shorter
and fuller (100% instead of the current 90% average)
depreciation schedules so as to be able to compete with
other manufacturing economies. Homma also commented that
consumption tax may not have to go up as much as first
feared. ***Ed: No indication of just what the new
consumption tax rate will be though.** (Source: TT
commentary from, Nov 11, 2006)

-> Tax revenues jump

Providing some credibility to Abe's claims that the pump
priming of companies will increase the tax take, the
Ministry of Finance has confirmed recently that thanks to
the recent economic recovery, the national tax take for
fiscal 2006 will climb by at least 8% from JPY46trn
(US$380bn) to JPY50trn (US$423bn). If corporate income
continues to grow at the current rate, a strong possibility
if the BOJ keeps interest rates down and thus contributes
to a weak yen, and if the income tax breaks are cut early
next year, then FY2007 tax income is projected to hit
JPY52bn (US$440bn). (Source: TT commentary from, Nov 10, 2006)

-> MySpace coming to Japan

News Corp and Softbank have announced that they will create
a joint venture to host and operate a Japanese version of
MySpace. News Corp. bought MySpace in July 2005, and it is
now the largest Social Networking site in the world, with
over 125m registered members. From the press conference by
the two partners, it appears that MySpace will target local
SNS company Mixi. They also plan to put the MySpace service
on cell phones. (Source: TT commentary from, Nov 7, 2006)

-> Google print ad service

Google has said that it is considering launching a print ad
service in Japan similar to one being trialled in the USA.
The idea is that Google aggregates ad space and resells it
to its online customer base, thus diversifying its revenue
base. ***Ed: The Nikkei newspaper has expressed doubts
about the system working here, since the print advertising
industry is pretty much controlled by the big 4-5
publishers and the ad agencies servicing them. However,
smaller publications, of which there are several thousand
if you include magazines, could well appreciate a new
source of less circulation-discriminating advertisers.**
(Source: TT commentary from, Nov 7, 2006)

-> Aussie milk supply may dry up

Dairy Australia says that buyers are worried about milk
supplies from Australia, due to severe drought there, and
that it may have to source supplies from other countries to
satisfy the Japan market. Japan accounts for about 20% of
Australia's dairy exports and is considered a long-term
market. Dairy Australia indicated that if necessary, Japan
would be supplied with priority over China, which is
considered a short term market. ***Ed: 96% of the state of
NSW in Australia has been declared drought affected, and
apparently dams are at less than half last year's reserves,
and summer is only just beginning.** (Source: TT commentary
from, Nov 10, 2006)

NOTE: Broken links
Many online news sources are now removing their articles
after just a few days of posting them, thus breaking our
links -- we apologize for the inconvenience.


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Japan is home to the highest density of vending machines in
the world, with about 5.6m machines, or one for every 23
people. You can buy almost anything, and the Japanese do,
with about JPY6.67trn (US$56bn) being spent every year.

Yet, apart from the obvious players such as major soft
drinks companies, there have been no foreign owners of this
massive direct sales medium - until now.

Market Pioneer Japan is proud to announce that as of
October, 2006, it has built a network of 1,000 vending
machines placed nationwide, selling stickers and print
logos. We invite owners of licenceable characters to
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the Japanese market.

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- References will be required
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=> The following position is for LINC Media's BiOS Division.
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In this section we run comments and corrections submitted
by readers. We encourage you to spot our mistakes and
amplify our points, by email, to editors at

-> TT 396. We ran an article about the US kids'
puzzle-solving TV program, Blue's Clues, being licenced by
Hello Kitty owner Sanrio here in Japan.

*** Reader response: Blue's Clues is the source of one of
my favorite examples that I use in my cross-cultural
training sessions. One of my clients, a Japanese posted to
the US, had a young son who had spent most of his life on
US soil. One day he was watching along with his son as he
viewed one of his favorite videos, Blue's Clues. Listening
to his son sing along to the words, he was stunned to hear
"If something goes wrong, don't stop, just go on."

His immediate reaction was panic: "I had better get my son
back to Japan as soon as possible, because he's being
brainwashed!" Because from the Japanese perspective, if
something goes wrong, you must stop and analyze why it went
wrong and how you can prevent a reoccurrence, rather than
just keep on going and possibly have the same thing happen
again. So this makes me wonder how well Sanrio will be able
to translate this product to the Japanese market - perhaps
they will have to adjust the song lyrics! (Submission by
Rochelle Kopp, Managing Principal of Japan Intercultural
Consulting. Thanks, Rochelle!)

...The information janitors/


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Written by: Terrie Lloyd (terrie at

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