Lack of sleep costs Japan's economy billions every year

Nearly half of all full-time workers say they do not get enough rest, affecting productivity

SEOUL • Sleep deprivation is doing more harm in Japan than just making people grumpy and unhealthy. It is also holding back the world's third-largest economy.

The problem has been getting worse in recent years. Nearly half of all full-time workers say they do not get enough sleep, citing long overtime hours as a main reason, according to a government White Paper on "karoshi"- death from overwork.

That is largely the result of an unforgiving work culture that includes abundant overtime, said Ms Junko Sakuyama, an economist at Dai-Ichi Life Research Institute in Tokyo. 

"There's an atmosphere at work that you have to work long hours and you shouldn't leave the office on time, resulting in a lack of sleep and making it difficult for workers to keep up productivity," Ms Sakuyama said.

A few companies are taking action, creating or bolstering "minimum rest" requirements, or the number of hours a worker must take off before returning to work. 

  • TOLL ON JAPAN'S ECONOMY

    $196b

    Annual economic cost of sleep deprivation in Japan.

    2.9%

    Impact on GDP.

Sumitomo Mitsui Trust Bank extended its nine-hour minimum to all employees, including contract staff, in December. Since last month, diaper maker Unicharm has required at least eight hours of time off, and prevents workers from staying later than 10pm.

Unlike the European Union, which mandates 11 consecutive hours of downtime in every 24 hours, Japan has no laws governing minimum rest periods.

Only 2 per cent of about 1,700 companies surveyed by the government have minimum daily rest periods, according to a White Paper released in October.

The Japanese government has set aside about 400 million yen (S$5 million) for the next fiscal year for an incentive programme to encourage small and medium-sized companies to adopt minimum rest periods.

A subsidy of up to 500,000 yen will be available per company to help pay the costs, including revising employment rules, training and updating software that manages work data, according to the Labour Ministry.

While a number of factors are to blame for Japan's poor productivity per worker, sleep deprivation is costing Japan more than its peers in the Group of 7, according to a five-nation study by Rand Europe, a subsidiary of the research group Rand.

Lack of sleep is a drag of up to US$138 billion (S$196 billion) a year on Japan's economy, or about 2.9 per cent of gross domestic product, the study found.

Simply increasing nightly sleep from under six hours to between six and seven hours could add US$75.7 billion to the Japanese economy, the report said. 

"Long working hours are a crucial problem in Japan's labour market," Ms Sakuyama said.

Japan must alleviate overwork to reduce the number of people who work themselves into early graves, as well as to raise productivity as the population shrinks, she said.

In an effort to curb excessive work hours and to spur consumption, the Japanese government and business groups are launching a "Premium Friday" campaign, scheduled to start next Friday.

One indication of just how tough it is to change Japan's rigid work practices: The Ministry of Economy, Trade and Industry, which is pushing the idea, has not decided yet if its officials will get to join in.

However, Minister of Economy, Trade and Industry Hiroshige Seko said: "I'm giving my secretaries a strict order not to put in any appointments after 3 pm" on the first Premium Friday.

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A version of this article appeared in the print edition of The Straits Times on February 17, 2017, with the headline 'Lack of sleep costs Japan's economy billions every year'. Print Edition | Subscribe