What Do Security Guards Say About Japan’s Economy?

One of the first thing visitors to Tokyo notice is the number of security guards at construction sites and shopping areas waving cars past with wands. Foreign economists often cite the guards as an example of Japan’s useless jobs – alongside elevator girls and tissue distributors – that provide meaningless work but keep unemployment low.  

I don’t think it is completely accurate to lump security guards into the “useless job” category, but their proliferation do illustrate some characteristics of the Japanese economy that differentiate it from other capitalist countries. 

How did Japan’s security industry develop? It started in 1962, when Japan’s first security company – now known as Secom Co. – was founded. Secom won fame after being awarded an exclusive contract to guard the Olympic Village at the first Tokyo Olympics in 1964. (According to Secom, it was a “tough job” with “a lot of unauthorized intrusions by thieves, children, and couples.”) 

As Japan’s economy boomed, so did the number of traffic accidents and related deaths, laying the groundwork for the industry of construction site and parking lot guards that are ubiquitous today. In 1969, a peak of 16.35 people out of 100,000 people were killed in traffic accidents. In 2015, that number was roughly three, according to National Police Agency data, one of the lowest numbers in the world. Japan’s security industry law was enacted in 1972. 

Regulations requiring guards at construction sites aren’t written in that law. They are instead mandated by local police rules, based on factors such as whether the construction is on a busy street. In Tokyo, those rules are strict, and police have not been willing to relax them despite a labor shortage. 

High-ranking police officials often get jobs in security companies or related organizations after retirement which disinsentivizes deregulation. (Driving schools are also an industry with strong police ties.) 

Coming back to the idea of “useless jobs” – some economists might argue that someone standing outside directing traffic for $100 a day doesn’t add much economic value. I would argue that it reflects a different choice that Japanese society has made as opposed to other capitalist societies.  

Currently, the industry for construction site guards is a receptacle for people who cannot find work in other places – nearly 95 percent of them men. Those include people who lost work in middle age, elderly workers who need to supplement their income, or people who simply are not cut out for a 9-to-5 desk job. Some of them just do the work for the flexibility (one security company executive complained to me that his regular pool of workers dried up during baseball finals), while others – especially the elderly – take real pride in their post. 

There are fewer pressures in Japan to get rid of the safe haven that the security industry provides for these workers. In sacrificing some flexibility in the labor market, Japan has chosen to retain job security for these workers. Remember that Japan has the lowest unemployment currently of any developed country. 

The question is whether Japan’s society can continue to pay the price of requiring all these security guards as it faces a labor crunch. 

As in other sectors, there is strong opposition to using foreign labor. Security company executives consider themselves to be “service businesses” and that foreign workers would not be able to live up to the standard of politeness required by the job. 

The security industry is concerned about what will happen in the 2020 Tokyo Olympics. There were shortages of private security guards in both the Rio and London Olympics. It is uncertain how security companies – the vast majority with less than 100 employees – will be able to deal with rising labor costs. 

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Eleanor worked for five years as a correspondent in the Tokyo bureau of The Wall Street Journal covering economy, finance and Japan's butter shortage. She is a graduate of Georgetown University, and her favorite animal is a capybara.

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