Watch how it works.
Japan Today carried a story about how the Japanese government is looking to modify the guideline for enrolling an employee in the Shakai Hoken (employer’s social insurance) from workers generally being in with 30 hours per week, to 20 hours per week. And including an annual minimum of 650,000 yen in wages.
This is, effectively, not much of a change: because the government doesn’t really “enforce” the guideline. Now, if they had said, here is the new guideline, and here are the penalties for not following the guideline . . . Things would be different. But, as you read the comments, the topic inevitably turns to: “why should I have to pay?”
The bottom line is that social insurances (old age pension, disability, unemployment, and the biggie, health insurance) act as a tax on wages. Who bears the incidence of tax? Well, the employee–not the employer, who simply withholds what it would have paid to the worker in order to cover the insurances.
This is Step One in the analysis, and where most of the Japan side gaijin community stop. If they can get around paying, they have “won”. And this has gone on for years.
But then, there is Step Two. Step Two is that once certain employers figure out that they can politick the enrollments into “let’s dodge it together, and you’ll save money!”, then the wages are all bid down to a level, where it would have been better that everyone follow the rule.
Why? Because when your buddy does everything under the table, it forces you to do everything under the table to be competitive. In the context of the Eikaiwa (English conversation school) “industry”, the Japanese government knows exactly what it’s doing. It is a way to cheat foreigners out of the pension and health care coverage.
The runners of Japan are expert in letting the hot air, of a lot of talk, mask the scam that is going on right underneath. They think that hot air doesn’t smell. Or that the hot air covers for the hot gas coming from someplace else.