ZMP workers in Japan, boredom and banishment rooms

by on August 18, 2013 at 7:06 pm in Economics | Permalink

We have already covered this topic, but the NYT has a new and interesting article on it.  Excerpt:

Shusaku Tani is employed at the Sony plant here, but he doesn’t really work.

For more than two years, he has come to a small room, taken a seat and then passed the time reading newspapers, browsing the Web and poring over engineering textbooks from his college days. He files a report on his activities at the end of each day.

Sony, Mr. Tani’s employer of 32 years, consigned him to this room because they can’t get rid of him. Sony had eliminated his position at the Sony Sendai Technology Center, which in better times produced magnetic tapes for videos and cassettes. But Mr. Tani, 51, refused to take an early retirement offer from Sony in late 2010 — his prerogative under Japanese labor law.

So there he sits in what is called the “chasing-out room.” He spends his days there, with about 40 other holdouts.

For the pointer I thank Alex.

Scott August 18, 2013 at 7:55 pm

“For more than two years, he has come to a small room, taken a seat and then passed the time reading newspapers, browsing the Web and poring over engineering textbooks from his college days.”

Now that’s a job I’d like to have!

somaguy August 19, 2013 at 2:47 am

No kidding. Think of the things you could do. Work on a pet project! Write a book! With a “@companyname.com” email address, you could even run your own legit-sounding consultancy.

John August 19, 2013 at 4:49 am

Good luck getting copies of your book to anyone. It was written on company time.

Bill August 18, 2013 at 8:07 pm

What is the equivalent banishment room for unproductive tenured faculty?

James H. August 18, 2013 at 8:13 pm

” for Nonmajors”, I believe.

JohnC August 18, 2013 at 9:20 pm

With classes scheduled on Monday mornings and Friday afternoons.

Sbard August 18, 2013 at 11:01 pm

And refusing to let them take on more grad students.

Roger August 19, 2013 at 12:18 am

If you ever see a class scheduled for Mondays 8:30am-10am and Fridays 4pm-5:30pm you’ll know why.

Gil August 18, 2013 at 9:20 pm

Princeton.

Z August 19, 2013 at 3:37 pm
Dan H. August 20, 2013 at 3:56 pm

“The Faculty Lounge”

Dismalist August 18, 2013 at 8:14 pm

Fascinating, but doesn’t ring like the whole truth: “Lifetime employment” was made possible by workers accepting a wage that was, on average, somewhat low. Workers were paying for their own insurance, with the employer being the insurance agency. Before the 1990′s it was additionally common for older workers and managers to be eased out into supplier companies and such.

I suspect the rest of the truth is that those institutions, legal or practiced, are not sufficient to enure profitable adaptation in a time of rapid technological change. It may have been sufficient and easy when Japan was catching up, but now that Japan is near the technological frontier, it’s not.

[By the way, compared to, say, France, Japan has few labor market problems. The heavy hand of the law weighs more heavily in that country than in Japan.]

BC August 19, 2013 at 11:09 pm

Insurance hypothesis is interesting. The implication is that the high-productivity workers, rather than firm customers and shareholders, are the ones that are most harmed by ZMP workers: they have forgone higher wages to pay for “non-productivity insurance” that they don’t really need. An analogy might be teachers unions’ opposition to teacher evaluations and merit pay. Good teachers might be hurt through lost pay increases more than taxpayers are hurt by overpaying bad teachers. Considering a country in the aggregate, policies designed to mitigate income inequality likely end up hurting the most productive workers rather than, say, having costs passed on to those that purchase the country’s exports.

If the issue is increasing competition during a time of rapid technological change, however, that would seem to argue in favor of, rather than against, the insurance hypothesis. If a firm faces a lot of competition, they will have difficulty passing on the cost of ZMP workers to customers. If capital is mobile, the firm will also have difficulty paying investors a non-competitive return relative to other uses of that capital. Thus, it would seem that greater competition increases the cost burden borne by the high-productivity workers, especially if most firms in the country employ ZMP workers and high-productivity workers are unable or unwilling to move to countries with fewer ZMP workers.

Andrew Smith August 18, 2013 at 8:21 pm

These guys are Zero Marginal product, they are negative marginal product, surely.

Ronald Brak August 19, 2013 at 2:38 am

These people are in the banishment room as an explicit threat to other workers showing them what will happen if they don’t take early retirement. There is presumably nothing wrong with them. (Although there might be some things wrong with them now.) Their company is simply screwing them over by cutting them off from company life because it is cheaper to punish those that don’t take early retirement than it would be to retrain the large numbers that would stay on if they didn’t engage in such foul behaviour.

asdf August 19, 2013 at 9:05 am

Indeed, from the article its not that this person was bad at his job, but that his division is no longer needed and they don’t want to transfer him.

Like most salarymen he probably put in a shitload of unpaid overtime when he was young in order to pay his dues and climb the ladder, but then the ladder came out from under him.

bob August 19, 2013 at 12:57 pm

If anything, this should tell us about the difficulty of partially adopting someone else’s labor force model. If the japanese salaryman is fired, can he even find a job that resembles his skill, or does the culture make him unemployable?

What brings improvement is a two sided reform that tries to bring in a different equilibrium. If you bring employment at will to southern Europe, you won’t magically get American results: You’ll still get few employers who aren’t really competing for workers and for business: You get the old model, with social unrest because workers now earn less. Almost every worker in Greece would be better off in an American environment, but good luck making a change that works.

vali1005 August 19, 2013 at 12:20 pm

The fact that there are other people in that room helps immensely with being able to get through your day. You’re not alone/isolated, you’re part of a circle that empathizes with you. As long as you’re not driven crazy by the fact that you’re not doing many meaningful things, it sounds like you’re getting paid just to stay current with what’s going on with the world (as well as the other people in the room).

Marie August 18, 2013 at 8:25 pm

“Waiting for Superman” has a segment similar, but probably worse — teachers in the public system in, I believe, D.C. who have been removed from the classroom for various reasons but can’t be removed from the payroll.

Worked with a woman once in an AZ school, horrible behavior and probably poor emotional heath, seemed to be deeply anti-Hispanic in a school of nearly 100% Mexican-American students (one student was a teacher’s kid). She passed out in class when the students left a threatening note on her desk. Didn’t have to work another day that year, but drew full salary, we were told.

Paul Rain August 19, 2013 at 7:21 am

Well to fair, these teachers could well have been reasonable teachers in the classrooms of the 50′s and 60′s. You’ve indicated in you comment that the students of the particular teacher you are using as an example should have gotten a good lashing. The fact that they didn’t is not the fault of the teacher.

It’s hardly reasonable to expect them to adapt to the gross degradation that has taken place since then.

lathrop August 18, 2013 at 9:15 pm

…. sounds a bit like the infamous “Rubber-Rooms” established by the New York City Board of Education.

Incompetent or misbehaving NYC public school teachers were assigned to do-nothing waiting-rooms/lounges each day, at full pay, far from any school. They couldn’t be readily fired due to union rules and were too risky for school duties.
Hundreds of teacher typically occupied such Rubber-Rooms for months or years each. The program cost NYC taxpayers $30-60M each year, over many, many years.

Boonton August 19, 2013 at 11:45 am

To be fair some of the teachers in the ‘rubber rooms’ were under investigation for wrong doing but the cases hadn’t been decided yet. If they were vindicated the expectation was that they would return to regular teaching duties….and sometimes they are vindicated. Teachers are sometimes accused falsely either by students or because of politics with Principals and school administration.

xraymike79 August 18, 2013 at 10:37 pm

I’m reminded of the cult movie ‘Office Space’ in which Milton Waddams is relocated to the company’s dark basement.

Euripides August 18, 2013 at 10:38 pm

I think GM or one of the big 3 was doing this same thing a few years ago because of union contracts. There was 60 minutes story on this.

JWatts August 19, 2013 at 7:14 pm

It was called the Jobs Bank.

Ed August 19, 2013 at 3:33 am

It sounds like this guy is already retired. If he had taken early retirement, would he be doing anything different with his time?

If he had taken early retirement, would would the cost to the company be in pension, severance, and the like? They might be benefiting themselves from the arrangement.

Kristian August 19, 2013 at 6:02 am

What is incredible here, is that Sony does not find something meaningful for these 40-odd employees, but just think it worthwhile to let their competence be unused.

Boonton August 19, 2013 at 11:42 am

Seems like a bit of game theory. Yes Sony might find something useful for those 40 odd employees to do. Maybe they could even return them to normal work.

But what would happen if five years from now Sony decides it has to lay off several hundred people. Knowing the story that some of the holdouts were able to get their jobs back by waiting out Sony, Sony may discover a huge number of those layoffs would opt to wait out in the ‘chasing rooms’ rather than taking packages.

Hence you get a paradoxical case where even if Sony needs a job done, they opt to go hire a new person rather than pluck someone who might do it prefectly well from the ‘chasing room’.

mpowell August 19, 2013 at 12:57 pm

This should be pretty obvious. ZMP is totally irrelevant to this situation. Very poor title choice for TC.

Spencer August 20, 2013 at 11:44 am

In Post WWII Japan the wage system was very unusual. Normally, one-third to one-half of annual wages came in the form an annual bonus that cut be cut or eliminated in hard times.

It worked just like libertarians claim it would until the lost decade.

So why didn’t a massive wage cut work in Japan in the lost decade?

I do not know. Has any one looked at this?

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