Question

What are the benefits and costs of an economy switching to a "gig economy" format? Compare to a lifetime employment model that used to be seen in Japan

Answer 1

Lifeteime employement is a concept which was originated in Japan but now is losing its popularity.

it works in the following way: the firms or companies hire workers right after they finish their school for regular jobs and keep then unitil retirement, even when the workers dont possess any special training or skill.

They are considered company's human capital and provided with training and skills throughout their job period. An important characteristic about this is that there is no written contract regarding it. the employers wont layoff their employees even in severe conditions and the labour laws are also there to protect them , and the workers or employees would be loyal to their companies and would not leave them for any better jobs or pays.

but after the 1990s after a prolonged economic recession and an ageing work force this lifetime employemnet concept has declined.

the major negative aspects of lifetime employment was

for companies

this system lacks flexibilty and variety. the same person with almost same methods of work wouyld work fro next 4 decades. it creates a rigid and less creative corporate area .

also the company cant lern from its successes and failures since bringing new workers from experienced background is not possible.

it prevents new ideas and also the new competition from coming in which leads to lack of competition .

in times of recession , the companies find it unprofitable and disadvantageous to maintain full employment of which the pressure is created on them.

for workers

they need to work in the same company which leads to their experience being wasted in a way.

since other companies cant employ them for better wages , they are stuck in the same company even when thay are unsatisfied.

since they remain employed in the same company , the promotions tend to be slow as well

so along with the advantages there are these disadvantages which have led to a decline in the popularity of this concept.

4) Japanese economic miracle was a period of economic growth of Japan after World War II and before the ned of cold war. this was the epriod when Japan grew rapidly and became the second largest economy.

but during the 1990s the economic depression had set in , so the growth of japan was stagnanted after that. It was the benefits from the cold war to Japan that led to this growth.

The main characteristics of the economy which led to this growth were

to make practical use and improvise the technology which was imported from other countries. it was combined with domestic innovation and put in best use.

the cooperation or closely knitted groups of suppliers , retailers, banks , distributors etc . it was one of the main reasons of economic growth which is also known as keiretsu

the strong trade unions which dominated the industrial sector called as Shuntō

presence of lifetime employment and healthy relations with the government .

all of it contributed to japanese economic miracle.