Lost Sleep Is Costing Japan’s Economy Billions

Japan loses up to $138 billion a year, study finds

by Keiko Ujikane | February 15, 2017, 3:00 PM CST| From Benchmark | Bloomberg.com

A man takes a nap in Tokyo. Photographer: Junji Kurokawa/AP Photo

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 full-time workers say they don’t get enough sleep, citing long overtime hours as a primary 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 Junko Sakuyama, 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,” 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. Sumitomo Mitsui Trust Bank extended its nine-hour minimum to all employees, including contract staff, in December. Since January, diaper makerUnicharm Corp. has required at least eight hours of time off, and prevents workers from staying later than 10 p.m.

Read more: How the government is encouraging more leisure time.

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 percent 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 ($3.5 million) for the next fiscal year for an incentive program 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 manage work data, according to the labor ministry.

While a number of factors are to blame for Japan’s poor productivity per worker, sleep deprivation is costing Japan more than its G-7 peers, according to a five-nation study by RAND Europe, a subsidiary of the research group RAND Corp. Lack of sleep is a drag of up to $138 billion a year on Japan’s economy, or about 2.9 percent of gross domestic product, the study found.

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

“Long working hours are a crucial problem in Japan’s labor market,” 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.