Japan has more senior workers than ever, a result of an aging population and the need to fund retirement at later ages. But one odd practice in many Japanese workplaces is mandatory retirement at at age 60. In many places, the option to continue is available at only 1/2 salary

Sometimes the employee has the option to stay in a new or different position at the same company at ... 1/2 salary. If they’re lucky, maybe they can get a consultant gig at a client company at better compensation. If you’re unlucky, you end up working at a parking garage

Given that Japanese people have some of the highest life expectancies, many company severances and bonuses have been cut, and the pension system has funding concerns, the mandatory age retirement seems really silly and serves no purpose

Some govt offices and companies have recently raised their mandatory retirement ages to 65, but the system is still odd compared to other countries where working at even older ages in professions is normal. It’s a waste of talent. Japan’s rigid labor market is mostly to blame

The sexist comment furor that was in the news this past week involving 83-year old former PM Mori is also an interesting case of how those with connections and status can get well paid or positions with prestige at even old ages. Most other Japanese who retire have to drive taxis

Japan’s rigid labor market not only makes it difficult to fire workers, but also makes them expensive to keep on at older ages (when they top out in salaries), and forces the system of mandatory retirement. Another result: 40% of workers in Japan are now on temporary contracts

There are signs of change though. Last year, Toyota announced it would end its system of automatic salary increases, and evaluate employees on performance. Other companies now have similar systems, an encouraging trend towards better company management https://www.nikkei.com/article/DGXMZO64429590Q0A930C2TJ2000/