Amazon’s Auschwitz?


The Japanese Communist Party’s “Red Flag” newspaper wrote an article about the deaths of three Amazon Odawara warehouse workers. The article has been pulled down from the party homepage. The reality is that families of the dead never sued Amazon as the cause of death were deemed private matters. The Labor Safety Inspection Office never ordered remedial action to be taken after the deaths.

However the blogs about the warehouse are calling it “Auschwitz” because of low wages and long hours causing fatigue. In any event it seems that the Communist Party took it down on the basis that “Auschwitz” was deemed an inappropriate comparison to the plight of the factory workers at Amazon’s warehouse operations in Odawara.

The Japanese Ministry of Health, Labor and Welfare (MHLW) has been going to great lengths to improve work-life balance (e.g. Premium Friday) and limiting overtime to 100hrs a month and 720 hours per year.

Perhaps the MHLW could move to enforcing a minimum 10 working days holiday for staff. It is not hard to find holiday packages to Europe or America for  4 nights only. Hardly the ideal way to wind down.

Yet we mustn’t forget that Japan is not capitalism with warts but communism with beauty spots. Often change has to be driven at a government level because businesses are too afraid to make even boldly common sense moves by themselves for fear of losing face. Take former PM Koizumi’s “Cool biz” programme that encouraged companies to allow workers to abandon neckties and jackets in summer to combat the heat combined with power restrictions. Corporations were too afraid to think outside the “box”. The state needed to rubber stamp it as a norm.

Child Abuse – the shocking stats

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Child abuse is reaching shocking proportions globally. The stats you are about to read show just how widespread the problem has become.The National Institute of Health reports that approximately 80 % of those who attempted suicide had a history of child abuse. About 30% of abused and neglected children will later abuse their own childrencontinuing the horrible negative spiral.

We examine the US, UK, Australia and an outlier Japan, where child abuse cases have soared 111-fold in the last 30 years. Over 4,000,000 child abuse cases were reported in the US in 2015. Abused children show much higher tendencies for risky behaviours in later life. CM wrote about the shocking outcome of the independent report on child grooming gangs in Rotherham showing that the police and government were complicit for decades. We also wrote about abuse affecting safety at US schools, including mass shootings.

Warning – the data make for quite heavy reading. 


In 2016, CM wrote a piece on the breakdown in the nuclear family in Japan. The Ministry of Health, Labor & Welfare (MHLW) denoted that cases handled for child abuse in 2016 hit a record 122,578 cases, 111x the level of 1989. Part of the problem here would be due to a lack of reporting back then. However the growth in the last decade is still extreme. The MHLW denote over the last decade:

  • Physical related violence fell from 41.2% to 26% (despite doubling in absolute terms).
  • Neglect fell 38.5% to 21.1% (despite an 80% increase in absolute terms)
  • Sexual abuse fell from 3.2% to 1.3% (despite a 50% increase in absolute terms)
  • Psychological abuse jumped from 17.2% to 51.5% (a 10-fold absolute increase)

In the last decade filings of child abuse with the police have surged from 7% of all cases to 45%. Reporting to family or relatives has declined but neighbours remain the second largest factor in reporting abuse.

By prefecture, child abuse per 1000 children looks as follows as at 2016. The national average stands at 7.3 children per 1,000.

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While the rate of growth is high, Australia’s Institute of Family Studies has reported in its June 2017 statistics that in 2015/16 a total of 355,935 notifications of child abuse were made vs 252,962 made in 2011/12. Total substantiations grew from 48,420 to 60,989 respectively.

The rate of notifications has risen from 33.8 per 1,000 children in 2011-12 to 42.0 per 1,000 in 2015-16 (AIHW, 2011, 2017).

  • Physical abuse accounted for 18.3%
  • Neglect  accounted for 24.9%
  • Sexual abuse accounted for 12.2%
  • Psychological abuse accounted for 44.5%
  • 51% of victims were female.

In Queensland, South Australia and the Northern Territory neglect was the most common type of substantiated maltreatment. Victoria had the largest proportion of emotional abuse substantiations (64.5%) compared to other states and territories, whereas South Australia had the smallest proportion of emotional abuse cases (25.2%).

While there were some gender differences for all abuse and neglect types, girls were significantly more likely to be the subject of substantiation cases of sexual abuse (15.8%) compared to boys (8.5%). The proportion of substantiated cases of harm/risk of harm from child maltreatment related to sexual abuse ranged from 3.4% in the Northern Territory to 16.6% in New South Wales and Western Australia.

Infants (children aged less than 1 year) were most likely to be the subject of a substantiation (16.1 per 1,000 infants), followed by children aged 1-4 years (9.0 per 1,000 children aged 1-4). Children aged 15-17 years were the least likely to be the subjects of a substantiation (3.9 per 1,000 children aged 15-17).

Australian children from remote and very remote areas were most likely to be the subject of a substantiation (16.2 per 1000 and 23.5 per 1000 respectively) compared with children in major cities (6.2 per 1000). Children in lower socio-economic areas were more likely to be the subject of a substantiation than children in higher socio-economic areas, with 6.9% of substantiations occurring in the highest socio-economic areas compared with 35.7% in the lowest socio-economic areas. 

This contradicts the trend in Japan were relatively poorer (tend to be remote) areas seem less prone to incidents of child abuse.

Perhaps the disturbing sign in Australia is the incidence of out of home care (OOHC) which continues to swell in numbers. Between the years 2014-15 and 2015-16 there was a 10.8% increase in children (from 11,581 to 12,829 children) admitted to OOHC. In 2015-16 there were 3,035 more children admitted to OOHC than were discharged.  In 2015-16, the median age of admission to OOHC was 6 years, with 46% of children admitted to OOHC aged under 5. In comparison, the median age of discharge from OOHC was 9 years and 32% were aged 15-17, compared with 8% admitted to OOHC.

Most children who were in OOHC on 30 June 2016 were residing in home-based care (94%). Of these children, 39% were in foster care, 49% were in relative/kinship care, 5% in third-party parental care and 1% were in some other type of home-based care.


The US is a whole other category. While the media screams about the mistreatment of children at the Mexican border how many of them know the extent of child abuse within their own country? The American Society of Positive Care of Children notes,

  • 4 million child mistreatment referral reports received in 2015 vs 3.6mn in 2014.
  • Child abuse reports involved 7.2 million children vs 6.2mn in 2014.
  • 207,000 children received foster care services.
  • The financial cost of child abuse and neglect in the US is estimated at $585 billion (equivalent to the GDP of Sweden or Taiwan)
  • 75.3% of victims are neglected.
  • 17.2% of victims are physically abused.
  • 8.4% of victims are sexually abused.
  • 6.9% of victims are psychologically mistreated.
  • Highest rate of child abuse in children under one (24.2% per 1,000).
  • Over one-quarter (27%) of victims are younger than 3 years.
  • Almost five children die every day from child abuse.
  • 80% of child fatalities involve at least one parent.
  • 74.8% of child fatalities are under the age of 3.
  • 72.9% of the child abuse victims die from neglect.
  • 43.9% of the child abuse victims die from physical abuse.
  • 49.4% of children who die from child abuse are under one year.
  • Almost 60,000 children are sexually abused.
  • More than 90% of juvenile sexual abuse victims know their perpetrator.
  • 14% of all men in prison and 36% of women in US prisons were abused as children, twice the frequency seen in the general population.
  • In 2016, more than 2,300 children were reported as victims to the National Human Trafficking Hotline.
  • Average age of entry by a child prostitute is 13 yo. Life expectancy after becoming a prostitute is only 7 years57% of prostitutes were sexually abused as children.


Government figures show that 3,171 offences have been recorded in England and Wales across 80 platforms in England and Wales since a new anti-grooming law was introduced in 2017 which criminalizes sexual communication with a child. This amounts to almost 9 grooming offences on average per day. The police noted that

  • girls aged 12-15 were recorded in 62% of cases of grooming
  • under-11s were recorded in nearly 25% of cases.

Child abuse figures in the UK according to the NSPCC reveal

  • 1 in 20 children in the UK have been sexually abused
  • Over 8,000 contacts to the NSPCC’s helpline last year were concerns about sexual abuse
  • There are an estimated 137,000 women and girls affected by FGM in England and Wales
  • 1 in 14 children have experienced emotional abuse by a parent or guardian.
  • Over 19,000 children were identified as needing protection from emotional abuse in 2017.
  • 6.9% of children said they had experienced physical violence at the hands of a parent or guardian (3.7% said severe physical violence).
  • The NSPCC’s helpline responded to over 11,000 contacts about physical abuse in 2016/17
  • Over 6,000 children were identified as needing protection from physical abuse last year

The message is clear. The incidence of child abuse continues to rise to sickening levels. Perhaps the EU sums up its problem to an even more shocking degree:

“Few studies have been done on neglect, but analyses of worldwide research shows that prevalence is also high − 16.3% for physical neglect and 18.4% for emotional…They show a prevalence rate of 9.6% for sexual abuse (13.4% in girls and 5.7% in boys), 22.9% for physical and 29.1% for mental. Applying these figures to the population of children in Europe suggests that 18 million children suffer from sexual abuse, 44 million from physical abuse and 55 million from mental abuse.”

Maybe part of preventing neglect starts with the very basics:


So when we see media reports wailing about injustices which are relatively tiny in the grand scheme of things, perhaps we can reflect on the real problems that are right in front of our noses. #LetsEndChildAbuse

Premium Friday marks a year


12 months ago Premium Friday was initiated with much fanfare to get Japanese companies to push workers out the door with an early mark to encourage better work life balance from 3pm on the last Friday of each calendar month.

Unfortunately according to a survey conducted by METI, an average of only 11 percent of people said they were able to finish work early on the last 12 Premium Fridays. Only 22 percent of the about 1,130 companies that took steps to boost sales on Premium Fridays said they saw positive effects.

It is a good idea which would perhaps made better were individual companies to take the initiative to use the campaign on days that suited their business rather than sticking rigidly to a bureaucratic suggestion.

Premium Friday – don’t discount other ways to change labour in Japan


Premium Friday starts at 3pm today, an edict issued by the Ministry of Health, Labor & Welfare (MHLW) to encourage workers to go home at 3pm on the last Friday of every month to encourage better work-life balance. I am watching a TV program which has a camera on a company called USEN. A lot of the employees have been reluctant to leave the office as the bell tolled. Many seemed to sneak out hiding their faces as if being bundled into a police car on suspicion of committing a shocking crime.

Japan needs to invite flexible work practices period. Sadly, it took former Prime Minister Junichiro Koizumi to introduce ‘cool biz’ (wearing no necktie to work) to combat energy shortages and hot weather because companies wouldn’t be bold enough to make such common sensical steps for fear of the potential for backlash. Some companies like Calbee have already embraced working from home and other employee friendly policies, in part thanks to being a PepsiCo subsidiary. These are good examples.

I recall my first job in Sydney working for a Japanese company. As daylight savings dawned, the Japanese staff became somewhat despondent. To them, leaving before it got dark was somehow unfathomable. Sadly daylight savings in Sydney tended to mean it got dark around 8:30pm. So they’d twiddle thumbs and remain at their desk for little known effect. The gaijin staff used to encourage them to leave the office with them, whether a beer at the pub or a game of tennis to help them embrace better work-life balance but they wouldn’t have it, coming up with a litany of excuses to turn these gestures of goodwill down.

One Japanese company that I have huge respect for given it’s innovative thinking and unique business proposition is small, lean, pays its staff based on set formulas of success and has a very flat structure. Don’t kid yourself to think this is a cottage industry with a few mates. This is a serious TSE 1st section listed business which has posted stellar results and growth. I was drinking with two of them last night and one confessed working for this company is ‘heaven‘. This was a middle manager of a Japanese corporation who had just been handed a $250,000 (yes a quarter of a million US$) cheque for individual performance for hitting certain goals. Yet the MHLW had admonished the HR of this company for letting said individual work over a certain amount of hours (they have to check in and out everyday at work with an electronic pass). He said, “why should my company be given a ‘warning’ (no penalty mind you) when I alone choose to work hard to achieve my own goals. The company doesn’t care if I take long holidays or show up at 10am. As long as I bring results.”

Sadly, many Japanese companies are stuck in decades old work practices a where incentive pay is next to non existent. It is based on age, rank and tenure. Japanese are extremely well educated and committed but it is clear that many companies suffer from too many people not wanting to rock the boat. The idea is that by creating the least internal friction and managing one’s way to retirement is the risk free option.

I wondered at Toshiba’s recent plan to cut staff salaries and bonuses in a belt tightening strategy. Instead of trying to fix a problem, the idea is to hunker down and hold one’s breath. In some respects, I would imagine that proposals to improve inefficient business practices in the various divisions could save millions and be done simply by asking the underlings who usually keep quiet to speak of how they might improve process.

In my recent visit to the FSA I suggested that the next round of corporate governance code improvements be focused on staff incentivisation. To put that in perspective, C-level managers in a lot of Japanese firms have next to no skin in the game. Many look to steer their corporate supertanker in a relatively risk free way to ensure they leave with an unmarked (unremarkable?) period to get a healthy retirement package. Risk is rarely taken. The CEO of Sharp at the time of the Foxconn takeover had worked at Sharp for 36 years and accumulated $30,000 of stock. How could shareholders and staff benefit from a leader who had no big incentive to push for a bigger payout? If you were set to make an extra $1,000,000 on your shares or $10,000 which level would likely drive your decision to go into bat for shareholders? QED.

Premium Friday makes sense to help many old school corporates encourage work-life balance. It is vital. However the longer term solutions would be to encourage corporates to focus on motivational aspects. Working long hours is one thing but giving employees clear returns based pay formulae to make the long hours worth slogging then perhaps the psychological struggles of “death from over work” (Karoshi) would disappear.

Perhaps Premium Friday should focus on the old adage, “Love what you do and you’ll never work another day in your life!”

I’ve seen how amazing Japanese companies can be. Some investors used to take pot shots at Japanese exporter companies for sub-superior returns when the yen was super strong. I did a study looking at if exchange rates of a decade ago were applied that these companies aggressive dieting programmes meant that profiotability was 50% higher relative. To that end as much as Korean analysts were calling the demise of the Japanese industrial giant, I warned them that if the yen retreated that the Koreans were toast. If the Japanese could compete with Korean car makers at Y80/$ then they’d wipe the floor at Y100/$.

So the point is that the Japanese are highly intelligent, ingenious, inventive and flexible people but often the nudge that is needed has to come from the state. While I applaud the Premium Friday measure, might I suggest to the MHLW that encouraging ‘incetivisation’ could also be a wonderful way to drive the productivity that is much needed to offset a withering workforce. I have ample evidence that employees in many companies wants to drive Porsche Cayennes and Maserati Quattroportes like my mate who has just bagged a quarter mill for hard graft!