Japan’s Business Owners Can’t Find Successors. This Man Is Giving His Away.

 

"An owner’s struggle in Japan’s northern dairy region illuminates one of the potentially devastating economic impacts of an aging society.

Hidekazu Yokoyama has spent three decades building a thriving logistics business on Japan’s snowy northern island of Hokkaido, an area that provides much of the country’s milk.

Last year, he decided to give it all away.

It was a radical solution for a problem that has become increasingly common in Japan, the world’s grayest society. As the country’s birthrate has plummeted and its population has grown older, the average age of business owners has risen to around 62. Nearly 60 percent of the country’s businesses report that they have no plan for what comes next.

While Mr. Yokoyama, 73, felt too old to carry on much longer, quitting wasn’t an option: Too many farmers had come to depend on his company. “I definitely couldn’t abandon the business,” he said. But his children weren’t interested in running it. Neither were his employees. And few potential owners wanted to move to the remote, frozen north.

So he placed a notice with a service that helps small-business owners in far-flung locales find someone to take over. The advertised sale price: zero yen.

Mr. Yokoyama’s struggle symbolizes one of the most potentially devastating economic impacts of Japan’s aging society. It is inevitable that many small and medium-size companies will go out of business as the population shrinks, but policymakers fear that the country could be hit by a surge in closures as aging owners retire en masse.

In an apocalyptic 2019 presentation, Japan’s trade ministry projected that by 2025, around 630,000 profitable businesses could close up shop, costing the economy $165 billion and as many as 6.5 million jobs.

Economic growth is already anemic, and the Japanese authorities have sprung into action in hopes of averting a catastrophe. Government offices have embarked on public relations campaigns to educate aging owners about options for continuing their businesses beyond their retirements and have set up service centers to help them find buyers. To sweeten the pot, the authorities have introduced large subsidies and tax breaks for new owners.

Still, the challenges remain formidable. One of the biggest obstacles to finding a successor has been tradition, said Tsuneo Watanabe, a director of Nihon M&A Center, a company that specializes in finding buyers for valuable small and medium-size enterprises. The company, founded in 1991, has become enormously lucrative, recording $359 million in revenue in 2021.

But building that business has been a long process. In years past, small-business owners, particularly those who ran the country’s many decades- or even centuries-old companies, assumed that their children or a trusted employee would take over. They had no interest in selling their life’s work to a stranger, much less a competitor.

Mergers and acquisitions “weren’t well regarded,” Mr. Watanabe said. “A lot of people felt that it was better to shut the company down than sell it.” Perceptions of the industry have improved over the years, but there are “still many businesspeople who aren’t even aware that M.&A. is an option,” he added.

While the market has found buyers for the businesses most ripe for the picking, it can seem nearly impossible for many small but economically vital companies to find someone to take over.

In 2021, government help centers and the top five merger-and-acquisitions services found buyers for only 2,413 businesses, according to Japan’s trade ministry. Another 44,000 were abandoned. Over 55 percent of those were still profitable when they closed.

Many of those businesses were in small towns and cities, where the succession problem is a potentially existential threat. The collapse of a business, whether a major local employer or a village’s only grocery store, can make it even harder for those places to survive the constant attrition of aging populations and urban flight that is hollowing out the countryside.

After a government-run matching program failed to find someone to take over for Mr. Yokoyama, a bank suggested that he turn to Relay, a company based in Kyushu, Japan’s southernmost main island.

Relay has differentiated itself by appealing to potential buyers’ sense of community and purpose. Its listings, featuring beaming proprietors in front of sushi shops and bucolic fields, are engineered to appeal to harried urbanites dreaming of a different lifestyle.

The company’s task in Mr. Yokoyama’s case wasn’t easy. For most Japanese, the town where his business is situated, Monbetsu, which has around 20,000 people and is shrinking, might as well be the North Pole. The only industries are fishing and farming, and they largely go into hibernation as the days grow short and snow piles up to roof eaves. In deep winter, some tourists come to eat salmon roe and scallops and see the ice floes that lock in the city’s modest port.

A street full of 1980s-era cabarets and restaurants is a snapshot of a more prosperous time when young fishermen gathered to let off steam and spend big paychecks. Today, faded posters peel off abandoned storefronts. The town’s biggest building is a new hospital.

In 2001, Monbetsu constructed a new elementary school building just around the corner from Mr. Yokoyama’s company. It closed after just 10 years.

In times past, the classrooms would have been filled with the grandchildren of local dairy farmers. But their own children have now mostly moved to cities in search of higher-paying, less onerous work.

With no obvious successors, the farms have folded one after another. Decades-high inflation brought on by the pandemic and Russia’s military operation in Ukraine has pushed dozens of holdouts into early retirement.

As local farmers have aged and their profits thinned, more of them have come to depend on Mr. Yokoyama for tasks like harvesting hay and clearing snow. His days start at 4 a.m. and end at 7 in the evening. He sleeps in a small room behind his office.

It would be “extremely difficult” if his business folded, said Isao Ikeno, the manager of a nearby dairy cooperative that has turned heavily to automation as workers have become harder to find.

On the cooperative’s farm, 17 employees tend to 3,000 head of cattle, and Mr. Yokoyama’s company fills in the gaps. No other area businesses can provide the services, Mr. Ikeno said.

Mr. Yokoyama began contemplating retirement about six years ago. But it wasn’t clear what would happen to the business.

While he had taken on a little over half a million dollars in debt, years of generous economic stimulus policies have kept interest rates at rock bottom, easing the burden, and the company’s annual profit margin was around 30 percent.

The ad he placed on Relay acknowledged that the job was hard, but it said that no experience was needed. The best candidate would be “young and ready to work.”

Whoever was chosen would take over the debts, but also inherit all of the business’s equipment and nearly 150 acres of prime farmland and forest. Mr. Yokoyama’s children will get nothing.

“I told them that if you want to take it over, I’d leave it to you, but if you don’t want to do it, I’m giving it all to the next guy,” he said.

Thirty inquiries poured in. Among those who expressed interest were a couple and a representative of a company that planned to expand. Mr. Yokoyama settled on a dark horse, 26-year-old Kai Fujisawa.

A friend had shown Mr. Fujisawa the ad on Relay, and Mr. Fujisawa immediately jumped in a car and showed up on Mr. Yokoyama’s doorstep, impressing him with his youth and enthusiasm.

Still, the transition hasn’t been smooth. Mr. Yokoyama is not entirely convinced that Mr. Fujisawa is the right person for the job. The learning curve is steeper than either of them had imagined, and Mr. Yokoyama’s grizzled, chain-smoking employees are skeptical that Mr. Fujisawa will be able to live up to the boss’s reputation.

Most of the company’s 17 employees are in their 50s and 60s, and it’s not clear where Mr. Fujisawa will find people to replace them as they retire.

“There’s a lot of pressure,” Mr. Fujisawa said. But “when I came here, I was prepared to do this for the rest of my life.””

Užmokesčio skaidrumo įstatymai neveikia taip, kaip skelbiama

  "Derybos DĖL ATLYGIMO jau seniai buvo viena kebliausių samdymo ar darbo vietos užėmimo dalių. Prašykite per mažai ir galite palikti pinigų ant stalo; paprašykite per daug ir jums gali visai nepasiūlyti darbo. Amerikoje tai subtilus balansavimo veiksmas tampa vis mažiau pavojingas. 

 

Sausio 1 d. Kalifornija ir Vašingtonas tapo naujausiomis šalies valstijomis, reikalaujančiomis, kad darbdaviai į visus darbo skelbimus įtrauktų minimalaus ir didžiausio atlyginimo ribas. 

 

Panašiais įstatymais siekiama suvienodinti sąlygas derybose dėl atlyginimų, lyčių ir rasinės darbo užmokesčio skirtumai buvo panaikinti Kolorado valstijoje, Niujorke ir keliuose miestuose. Lapkričio mėn. Niujorkas pradėjo vykdyti savo įstatymus. Tačiau, nepaisant tokių darbo užmokesčio skaidrumo įstatymų populiarumo, dabar jie apima maždaug penktadalį Amerikos gyventojų – jų poveikis vis dar plačiai nesuprantamas.

 

     Profsąjungų šalininkai pasisako už darbo užmokesčio skaidrumo įstatymus, remdamiesi tuo, kad jie sumažins atlyginimų skirtumus. Tačiau tyrimai rodo, kad tai pasiekiama, ne didinant atlyginimus mažiau apmokamiems darbuotojams, o pažabojus didesnį atlyginimą. Netrukus Toronto ir Prinstono universitetų ekonomistai apskaičiavo, kad Kanados atlyginimų atskleidimo įstatymai, įgyvendinti nuo 1996 iki 2016 m., sumažino universiteto profesorių atlyginimų skirtumą tarp lyčių 20–30%. Tačiau taip pat yra įrodymų, kad jie mažina vidutinius atlyginimus. Kitame INSEAD, UNC Chapel Hill, Kornelio ir Kolumbijos universiteto profesorių dokumente nustatyta, kad 2006 m. priimtas Danijos darbo užmokesčio skaidrumo įstatymas sumažino vyrų ir moterų darbo užmokesčio skirtumą 13 proc., pamažindamas vyrų algas. Panašių išvadų priėjo ir Didžiosios Britanijos lyčių ir darbo užmokesčio skirtumo įstatymo, kuris buvo įgyvendintas 2018 m., tyrimas.

 

     Kita klaidinga nuomonė apie darbo užmokesčio skaidrumo įstatymus yra ta, kad jie stiprina darbuotojų derybinę galią. Neseniai paskelbtame Zoe Cullen iš Harvardo verslo mokyklos ir Bobby Pakzad-Hurson iš Browno universiteto buvo analizuojamas 13 valstijų įstatymų, priimtų 2004–2016 m., skirtų apsaugoti darbuotojų teisę klausti apie savo bendradarbių atlyginimus, poveikis. Autoriai nustatė, kad įstatymai buvo susiję su darbo užmokesčio sumažėjimu 2 proc., o tai autoriai priskiria sumažėjusiai derybinei galiai. „Nors darbo užmokesčio skaidrumo idėja yra suteikti darbuotojams galimybę iš naujo derėtis dėl darbo užmokesčio skirtumų, iš tikrųjų derybinė galia perkeliama iš darbuotojų į darbdavį“, – sako J. Pakzad-Hurson. „Taigi, atlyginimai yra lygesni, – aiškina ponia Cullen, – tačiau jie taip pat mažesni.

 

     Bene didžiausias nesusipratimas dėl darbo užmokesčio skaidrumo įstatymų yra tai, kad jų neva tai sunku išvengti. Pavyzdžiui, Niujorke įstatymas taikomas beveik kiekvienam darbdaviui – atleidžiami tik tie, kurie turi mažiau, nei keturis darbuotojus. Įmonės, kurios pažeidžia įstatymus, gali susilaukti baudos iki 250 000 dolerių. Tačiau duomenys, kuriuos „The Economist“ pateikė darbo jėgos tyrimų įmonė „Revelio Labs“, rodo, kad tik į 58% Niujorko darbo skelbimų, paskelbtų lapkritį ir gruodį, pirmuosius du įstatymo galiojimo mėnesius, buvo įtraukti atlyginimų diapazonai. Kai kurie sektoriai labiau paiso įstatymų, nei kiti. Informacijos ir transporto srityje atitikties rodiklis buvo beveik trys ketvirtadaliai; komunalinių paslaugų, gamybos ir mažmeninės prekybos sektoriuose buvo mažiau, nei pusė.

 

     Taigi, kokia yra šių naujų taisyklių nauda? M. Cullen iš Harvardo teigia, kad jei jie informuos kandidatus apie tai, kurios įmonės ir pareigos moka daugiau, o kurios mažiau, tai gali padėti efektyviau derinti darbo ieškančius asmenis ir darbdavius. Nors kiekvienas, kuris to dar pats iki šiol nepadarė, bus nepalankioje padėtyje derybose dėl atlyginimo." [1]

·  ·  ·1.   "Wealth warning; Work and pay." The Economist, 7 Jan. 2023, p. 19(US).

 

Pay transparency laws do not work as advertised

"THE SALARY negotiation has long been one of the trickiest parts of hiring or being hired. Ask for too little and you may leave money on the table; ask for too much and you may not be offered the job at all. In America, this delicate balancing act is becoming less perilous. On January 1st California and Washington became the latest states in the country to require employers to include minimum and maximum pay ranges in all job advertisements. Similar laws aimed at levelling the playing field in salary negotiations and reducing gender and racial pay gaps have been passed in Colorado, New York and a handful of cities. In November New York City began enforcing its own law. Yet despite the popularity of such pay-transparency laws--they now cover roughly a fifth of the American labour force--their effects are still widely misunderstood.

Labour advocates champion pay-transparency laws on the grounds that they will narrow pay disparities. But research suggests that this is achieved not by boosting the wages of lower-paid workers but by curbing the wages of higher-paid ones. A forthcoming paper by economists at the University of Toronto and Princeton University estimates that Canadian salary-disclosure laws implemented between 1996 and 2016 narrowed the gender pay gap of university professors by 20-30%. But there is also evidence that they lower salaries, on average. Another paper by professors at INSEAD, UNC Chapel Hill, Cornell and Columbia University found that a Danish pay-transparency law adopted in 2006 shrank the gender pay gap by 13%, but only because it curbed the wages of male employees. Studies of Britain's gender-pay-gap law, which was implemented in 2018, have reached similar conclusions.

Another misconception about pay-transparency laws is that they strengthen the bargaining power of workers. A recent paper by Zoe Cullen of Harvard Business School and Bobby Pakzad-Hurson of Brown University analysed the effects of 13 state laws passed between 2004 and 2016 that were designed to protect the right of workers to ask about the salaries of their co-workers. The authors found that the laws were associated with a 2% drop in wages, an outcome which the authors attribute to reduced bargaining power. "Although the idea of pay transparency is to give workers the ability to renegotiate away pay discrepancies, it actually shifts the bargaining power from the workers to the employer," says Mr Pakzad-Hurson. "So wages are more equal," explains Ms Cullen, "but they're also lower."

Perhaps the biggest misunderstanding about pay-transparency laws is that they are hard to evade. In New York City, for example, the law applies to nearly every employer--only those with fewer than four employees are exempt. Companies that violate the law can face fines of up to $250,000. But data provided to The Economist by Revelio Labs, a workforce intelligence firm, show that just 58% of New York City-based job advertisements published in November and December, the first two months the law was in force, included pay ranges. Some sectors were more law-abiding than others. In information and transport the compliance rate was nearly three-quarters; in the utilities, manufacturing and retail sectors it was under half.

So what is the upside to these new regulations? Ms Cullen of Harvard says that to the extent they inform job applicants about which firms and positions pay more, and which pay less, they may lead to more efficient matching between job-seekers and employers. Though anyone who hasn't worked that out already will be at a disadvantage in any salary negotiation.” [1]

·  ·  ·1.   "Wealth warning; Work and pay." The Economist, 7 Jan. 2023, p. 19(US).