Evaluating the Social Meaning of Work in Japan’s Pension System

As one of the longest-living and healthiest populations in the world, Japan has an eye towards cultivating a society of happy centenarians. Inspired by a 2016 self-help book of the same name, ex-Prime Minister Shinzo Abe established the “100-Year Life Concept Conferences” in 2017 to build social and economic systems which can support fulfilling lives no longer constrained by outdated age ideals. One of its central goals is the diversification of corporate recruitment, including elderly employment. As a first step, the Japanese government is paying particular attention to the national pension system and labour policies which currently discourage workers from continuing employment past age 65, the standard retirement age.

In May 2020, the Japanese government approved a bill to raise the maximum retirement age – the age at which an individual begins receiving national pension – from 70 to 75 years old as part of its efforts to address chronic labour shortages and the accelerating retiree population. Currently, the standard retirement age is 65, but national pension members (ie. all registered Japanese residents) can retire anytime between ages 60 and 70 (Japan Pension Service, 2020). Monthly contributions are standardised regardless of income level (SGD213/month for the fiscal year 2020) and are paid from ages 20 to 59.

However, the national pension system is structured so that members are financially incentivised to defer pension receivement: the monthly pension stipend, which is fixed throughout one’s retirement, increases the later one decides to begin receiving pension.

For example, if an individual retires at age 70, then the stipend will be 42 percent greater than the stipend they would be allocated if they retired at age 65 (SGD 839/month for the fiscal year 2020). Once the bill is implemented in 2022, individuals who retire at age 75 will receive a monthly stipend 84 percent greater what they would have begun receiving at age 65 (Pension Housing Welfare Association, 2020).

This amendment has been officially advertised as offering more flexibility for adjusting access to national pension according to one’s employment situation, allowing workers to continue contributing to society in diverse workplaces and environments beyond the standard age for retirement (Ministry of Health, Labour and Welfare 2020). In other words, given the longer lifespan of its population, the government aspires to shift the social meaning of labour such that it denotes a path towards a fulfilling and socially active life rather than a mere means for financial stability.

Yet government statistics show that this policy change is not motivated by population demand: as of 2016, merely 1.4% of national pension members age 70 had deferred their pension payments, in contrast to the 20.5% who had expedited their pension payments. This is puzzling because, according to a 2019 government survey, 55.3% of 60-year-olds are keen on working past age 65.

Murakami (2019) claims that workers are willing to continue working and upskill if necessary but do not do so due to financial insecurity. Many corporations reduce pay and benefits once their employees reach the current minimum retirement age of 60, and the culture of full-time recruitment in Japan is typically restricted to fresh graduates and foreign professionals. The few who pursue the pension deferral option, such as those interviewed by Kajimoto (2019), feel they have “no choice but to work” due to their financial and social circumstances. This implies that the amendment to the pension system may be eliciting pressure rather than opportunity for prolonged employment.

The disjoint between the state aims and public reception towards financial incentives for deferring pension payments points to diverging social meanings of work in Japanese society. Although the government aspires to encourage elderly employment by expanding the retirement window, the elderly population who currently defer pension payments to age 70 continue work due to financial constraints they face (Japan Cabinet Office 2015), and life plan fulfilment (ie. working for the non-monetary benefits such as social involvement) is a secondary consideration. Given the apparent interest in working into old age, the extremely low proportion of elderly who pursue deferred retirement also suggests that the financial incentive offered is either insufficient or misdirected.

I argue that, when evaluated within Walzer’s theory of ‘complex equality’, raising the maximum retirement age promotes equal rights and opportunities for work insofar as the current seniority-based workplace system is abolished and expertise/skill becomes the primary criteria for evaluating workers. If the social norms and practices associated with work are not revised according to the social meaning of work guiding elderly labour and welfare policy changes, then work may acquire dominance beyond its distributive sphere and negatively affect the distribution of other basic capabilities such as health care.

According to Walzer (1983), the social meaning of a good is not restricted to its intrinsic characteristics, but instead is determined by their value particular to their historical and sociocultural context. Given that “the conception and creation [of social goods] precede and control the[ir] distribution” (p. 6), distributional justice is relative to shared social meanings of the goods involved. For example, the social meaning of work in Japan for the past few decades has been rooted in the ideal of arduous work for seniority-based social status and financial security, which allows for a culture of ‘just’ overtime and workplace harassment. Since goods have distinct and diverse social meanings, distributional justice should be determined within the particular distributional spheres which goods belong to rather than across the distributional system of society.

Walzer takes a step further to argue that social goods can possess dominance – their ability to influence the distribution of other social goods – and also uphold distributional justice insofar as it operates exclusively within the distributive sphere(s) they belong to. Put differently, social goods cannot dominate distributions outside its sphere because doing so will result in an unjust monopoly over goods. By prohibiting exchanges between distinct spheres, Walzer’s ‘complex equality’ accommodates a diversity of life plans which value goods and dominance in different distributive spheres.

The danger of work acquiring an inadvertent monopoly over the distributive sphere of welfare, I argue, is the nexus of the pension deferral issue. The Japanese government aspires to change the distribution of labour by introducing policies rooted in a new social meaning of work which prioritises flexibility in employment arrangements and is thereby inclusive towards elderly employment. Yet not only is the distributive sphere of labour still governed by old social meanings of work which discriminates against elderly employment, but the pension deferral amendment inadvertently propagates the old social meanings of work. In other words, allowing pension deferral until age 75 is intended to allow workers to continue working if doing so aligns with their life plans, but it also allows for corporate exploitation of financially insecure workers who are unwilling to continue working but are pressured to because the option to defer retirement is available.

For example, the mandatory retirement norm allows corporations to lay off workers at age 60 unless they wish to continue working as irregular (part-time) workers, which are relegated to reduced responsibilities and salaries. Given that elderly welfare such as Long Life Medical Care, which provides greater medical subsidies, are typically not accessible till the maximum retirement age (Ministry of Health, Labour and Welfare, 2020), low-income elderly workers are more vulnerable to climbing living costs that come with old age. Consequently, the dominance of work may spill over its distributive sphere and unjustly affect the distribution of welfare. The pension deferral amendment operates within the social meaning of work which pushes for distribution according to ability and willingness, but is currently applied in the distributive sphere of labour which still operates according to the social meaning of work which allows for distribution according to age.

Furthermore, Walzer’s conception of ‘complex equality’ which focuses on protecting the distinct meanings and principles internal to distributive spheres allows us to distinguish the current disalignment between the spheres of labour and welfare in Japan. Under its new social meaning which prioritises capability over seniority, the distribution of work is no longer primarily determined by age. The distribution of welfare, however, is still determined by age because the the social meaning of welfare prioritises need, and need is inevitably variable according to age. According to Walzer, “[n]eed generates a particular distributive sphere, within which it is itself the appropriate distributive principle” (26) because it operates on lackingness rather than possession. If the dominance of work extended to the sphere of welfare, then the distribution of welfare would become endangered to work capability and no longer be governed by need alone. For instance, an elderly worker of poor health may be pressured to continue working because their age disadvantages them in the distribution of work as well as welfare. Preserving the autonomy of distributive spheres allows for unequal access to social goods which do not affect distributions governed by need.

The Japanese government, in fact, recognises the disjunction between the new social meaning of work and existing workplace norms which uphold the conventional social meaning of work, and is amending retirement policies in efforts to bridge this gap. From 2025, all corporations will be required to either abolish mandatory retirement, increase the mandatory retirement age to 65, or allow the recruitment of retirees (Ministry of Labour, Health and Welfare 2020) in hopes that institutionalising elderly work will align the social meaning of work in workplaces to that of the state. Corporations are also being encouraged to revise their recruitment systems such that hiring is based on ability and potential rather than age. Until these adjustments are normalised, however, the elderly will undoubtedly face difficulties when evaluating their life plans against evolving state and corporate labour policies.

 

References

 

Japan Cabinet Office. (2015). An International Comparative Survey on the Lives and Consciousness of the Elderly. Japan Cabinet Office. https://www8.cao.go.jp/kourei/ishiki/h27/gaiyo/index.html.

Japan Cabinet Office. (2019). Annual Report on Ageing Society. Japan Cabinet Office. https://www8.cao.go.jp/kourei/whitepaper/index-w.html.

Japan Pension Service. (2020). National Pension System. Japan Pension Service. https://www.nenkin.go.jp/international/japanese-system/nationalpension/nationalpension.html.

Kajimoto, T. (2019). Retiring late: As pensions underwhelm, more Japanese opt to prolong employment. Reuters. https://www.reuters.com/article/us-japan-economy-retirement-idUSKCN1RM0GP.

Ministry of Labour, Health and Welfare. (2020). Elderly Employment. Ministry of Labour, Health and Welfare. https://www.mhlw.go.jp/stf/seisakunitsuite/bunya/koyou_roudou/koyou/jigyounushi/page09.html.

Ministry of Labour, Health and Welfare. (2020). Towards the ‘Age of the 100-Year Life’. Ministry of Labour, Health and Welfare. https://www.mhlw.go.jp/stf/seisakunitsuite/bunya/0000207430.html.

Murakami, Y. (2019). Breaking the spell of aging. The Japan Times. https://www.japantimes.co.jp/opinion/2019/02/04/commentary/japan-commentary/breaking-spell-aging/

Pension Housing Welfare Association. (2020). Maximum age for deferred payment will become 75 years old. KURASSIST. https://kurassist.jp/kurassist-eye/eye50/01.html#.

Walzer, M. (1983).  Spheres of justice: A defense of pluralism and equality. New York: Basic Books.

 

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Articles were originally submitted as course papers for Professor Sandra Field’s classes Contemporary Egalitarianism and Democratic Theory.

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