TOKYO—As The Prospect has been reporting, the Japanese bureaucracy intervention is getting out of control: Now, the Japanese trade ministry is telling eight large and mid-size convenience store CEOs to submit programs to cope with spiraling labor shortages as the industry leader, Seven and I Holdings Co., Ltd., is being challenged by its franchisees to operate less than twenty-four-seven.
On April 4, the company, which operates 7-11 convenient stores, announced the appointment of its new CEO, Fumihiko Nagamatsu, presumably to deflect franchisee criticisms about the 24-7 store opening and other what they viewed as high-handed policies. At the same earnings report news conference the same day, Nagamasa failed to promise ending the 24-7 policy drawing franchisee ires and revealing numerous cracks in the company’s management policy, among them extraordinary high franchisee fees.
Nagamasa’s uncompromising attitude sparked national debate about 24-7 operations of not only convenience stores but other industries reeling with worsening labor shortages, the effect of the country’s rapid population aging and contraction. That had drawn bureaucrats’ attention that are always looking about for opportunities to expand bureaucracy reaches, and they urged the Ministry of Economy, Trade and Industry, Hiroshige Seko, to tell convenience store companies to draw up ‘action plans’ on 24-7 store opening policy. A METI official said the action plan submission is ‘voluntary’ and that the government plans to advise stores to deploy IoT and AI technologies to cope with labor shortages.
On April 5, METI called a meeting of eight convenience store company CEOs, in which Seko said that METI’s research underscored growing disenchantment about convenience store business of franchisee owners about long store hours and other contract terms. As many as 61 percent of franchisees complained about manpower shortages and 39 percent were dissatisfied with their contracts with convenience store companies, according to the METI official, who said the results were worse than the previous research done in 2014.
In mid-March, approximately 100 franchisee owners of 7-11 Japan and Familymart convenient store companies were given by the governmental labor mediation board a ruling in their disfavor that they were not ‘workers’ and thus did not qualify labor law protection. But the fact they those franchisees grouped together had bearings beyond what they sought but given: Their pleas revealed the harsh realities of being a franchise owner, especially about manpower.
It’s the field that the bureaucracy is happy to intervene as part of the ‘work-style reform’ espoused by the prime minister Shinzo Abe cabinet. From April 1, 2019, nearly 10 labor-related laws were or scheduled to be amended on such vital human resources issues as employment, occupational hazard, labor contract, workplace safety and sanitation, pollution and the environment.
Since the amendments are new and ministry and agency ordinances that detail nitty-gritty Dos and Don’ts details have yet to be proclaimed in full, what will come about next is difficult to tell but once thing for sure i9s that the bureaucracy tentacles to the private sector will become longer.
Toshio Aritake