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Are you a forward thinker? Then you need a HR and finance platform that is too. Workday is the AI platform that helps propel your organization, your workforce and your entire industry into the future. It's how we're moving business forever forward. The Economist you Hello and welcome to The Intelligence from The Economist. I'm your host, Rosie Bloor. Every weekday, we provide a fresh perspective on the events shaping your world.
Japanese salarymen are known for having one job and sticking to it for life. But now, finally, people are starting to switch companies and even careers. Our correspondent explores this quiet revolution. And Volkswagen has been making cars for nearly 100 years. But that's not all this stalwart firm is known for. It also makes some apparently quite delicious sausages. And now they are going global. First up though. Early on Tuesday morning the victory speech. Who's ready?
Who's ready? Who's ready to stand up for Canada with me? Mark Carney won Canada's election in a stunning turnaround for the Liberal Party. Canada's next government will be a Liberal government. With the election called just weeks ago, the race was completely transformed by Donald Trump's first months in office. President Trump.
is trying to break us so that America can own us. That will never, that will never, ever happen. As Carney acknowledged in his victory address, Trump became the defining issue of this campaign. Our old relationship with the United States is over. But having united the country against America's president, As Carney now gets to work, he faces the real task.
dealing with Trump. Mark Carney, the former central banker, has won Canada's election for the Liberal Party in an astonishing turnaround that has seen the opposition Conservatives lose 29 points in the polls. over the last four months. Hal Hodson is our America's editor. And this loss is down to one factor, really, and that's Donald Trump and his aggression towards Canada and his promises to make it the cherished 51st state.
So Hal, explain that to me. What did Trump do that ended up with this astonishing turnaround for Carney? Well, let's go right back to the start. And for this story, that means about January when the Liberal Party under Justin Trudeau...
was plumbing absolute depths in the opinion polls. The Liberals had almost never been this unpopular, something in the region of 16 to 18 percent of people saying they plan to vote for them. In early January, before Trump's inauguration, Justin Trudeau announced that he would stand down.
This triggered a leadership race for the Liberals. And Mark Carney was the outsider candidate, as strange as it sounds for a kind of institutional man, a central banker, a personification of the elite to be an outsider. He was an outsider in Canada because he wasn't. as connected to Justin Trudeau as the other Liberal leadership candidates. So that was already giving the Liberals a boost because Trudeau was the totem of all things wrong with the Liberal Party and Carney junked all of it.
Then along comes Trump and starts bashing Canada over and over again, saying we're going to tariff you until you give in and become the cherished 51st state. It's a wonderful country. We love your water. We love your resources. We're going to need you for defense. And Canadians just get their hackles up. They start going to grocery stores and ripping American products off the shelves. They cancel their holidays. They sell their condos in Florida.
And Mark Carney suddenly doesn't need to campaign against his opponent, Pierre Polivier, the leader of the Conservative Party. He just needs to campaign against Donald Trump. And he trots to victory in what? Apart from this insane international dynamic with Trump.
This election was very placid. Nothing very exciting happened. Carney just stepped into this booster rocket. So if Trump is the defining factor of this election, why did Canadians think the Conservatives weren't up to the job of tackling him? Really? Because Pierre Polivra…
Sounds a bit like Donald Trump. He's sometimes called a mini Trump. He's sometimes called a polite Trump. Last year, he fostered good relations with the MAGA wing of the Republican Party. Elon Musk has said he's a great guy numerous times. And in 2024, this was pretty good for PolyEver because everyone in Canada was so sick of Justin Trudeau that maybe even some Trumpiness was worth a shot.
And also the left wing vote was very repressed and very depressed about how terrible Trudeau was and that there was no alternative. And then away goes Trudeau, along comes Carney, uprises Trump and the left wing vote gets activated to an incredible extent. And so what you've seen is a huge collapse in votes for the National Democratic Party, the Socialist Party in Canada.
weakening support for Bloc Québécois, which is a party that only runs in the province of Quebec. All those votes have flown to Mark Carney, to Captain Canada, as the Canadian media has been styling him, because they want someone who's going to stand up to Trump. And Paul Everett just hasn't. managed to do that he was starting from a point of real weakness because he sounded kind of Trumpy And even when he's tried to say Canada strong, we're going to have Canada first.
It just hasn't come across well. He's never repudiated Trump in the way that Canadians seem to want their leader to do. And he's paid the price. It actually looks like Polyever has lost his seat, which is pretty remarkable. And how is Carney going to deal with Trump and what else is on his list of most pressing issues?
Well, in many ways, they're one and the same because the most pressing issue is the Canadian economy. And if you look at its performance over the last few years, it is among the worst in any of the top 50 most developed countries. for economic productivity growth. So Carney wants to fix that. One of the ways he wants to do it is by massively boosting intra-provincial trade. I think perhaps listeners don't know this, but Canada is a very federalized place.
even to a greater extent in many ways than the United States. And the provinces don't trade well between each other. And so Carney wants to get a big GDP boost by increasing interprovincial trade. But in general, just addressing economic performance in Canada and making the country much stronger so that it is in a good position to stand up to Trump on tariffs and to carry out a trade war if needs be.
Now, in terms of dealing with Trump specifically, what our man in Canada, Robert Russo, tells me is that the liberals are likely to slow pedal this deal with Trump. There's no rush as far as Carney is concerned. And the reason for this is that the closer that Trump and the Americans get to the midterms next year,
the more pressure they're under not to do things which create market chaos or which raise prices for Americans. The Canadians currently have one of the best deals of any country because they have an existing free trade deal that... hard to tear apart the USMCA the United States Mexico Canada free trade agreement but that's also up for review next year And so I think the way Carney sees it is why rush into this when we have, relatively speaking, pretty good cards.
gigantic anti-Trump movement across the Canadian political ecosystem has a couple of other slightly more technical effects. One is that even though it's not yet clear whether the Liberals are going to have a majority, It's not going to matter too, too much because every new Democratic Party voter. hates Trump, essentially. And the elected representatives, the moment there's five, but there could be a couple more. It could be about seven seats in parliament.
they're going to swing behind the liberals on everything where Carney needs to stand up to Trump, at least at the beginning. So the jeopardy about whether or not they will form a majority government is a little bit lower than it might otherwise be, again, thanks to this Trump factor. Hal, what implications do you think Carney's victory here has had for upcoming elections in other countries as we see them voting in the new Trump era?
I think there's a few things. One is that The electorate seems to prefer a candidate who strongly stands up to intimidation by Trump and by the United States. There's a couple of other things, though. One is that Carney offers a path for left-wing parties, centre-left parties, to get out of the trap of the culture war. The problem with the culture war is that it creates this polarizing fight with the right about a relatively small set of issues.
that are not always the issues about which the majority of the electorate care. Carney just ditched that. He ditched Trudeau's entire platform and he even made pragmatic compromises on... bits of the platform which the economist thinks are pragmatic, such as a carbon tax, but which were creating enormous division. And so in a way, what Trump offers is. a chance for politicians to change their minds and to move quickly to the centre.
in a way that they won't be punished by the electorate for doing so. It's an opening for being much more sensible, much less rhetorical and much more pragmatic. And I think that's to be welcomed, really. Hal, thank you so much for talking to me. Thanks for having me, Rosie. Are you a forward thinker? Then you need a HR and finance platform that is too. Workday is the AI platform that helps propel your organization, your workforce and your entire industry into the future.
It's how we're moving business forever forward. We're Backmarket, the home of high-quality, affordable, refurbished tech. Like this smartphone, it can do all your phone things, like ignoring that cold call. This phone can also video chat, snooze, snooze again, like, unlike, and do everything a brand new phone can. There's just one difference.
This phone costs up to 50% less because it's not new, it's verified refurbished, meaning it's been inspected by industry experts and comes with a year's warranty. Not again. Backmarket. Downgrade now. 特にやっぱり上の人はすごい偉そうだし Kata Yasutoshi was never cut out for the traditional Japanese corporate life. Moeka Iida writes about Japan. He found working at a large electronics firm frustrating.
He said whatever a senior person said was considered absolute. For younger workers like him, there was no room to argue. He didn't like that kind of rigid hierarchy. He also found a lot of the work inefficient. Many hours slipped away either in front of the desk or at almost mandatory drinking sessions with colleagues. I asked what that process looked like. He said leaving proved very tricky and it caused a lot of friction. His superiors got very upset.
And they started berating him and even called him a traitor. Now almost 50, Mr. Kawada has changed jobs again. These days... people like Mr. Kawata are less of an outlier. In Japan, the ideal worker was someone who stuck with one company for life, but this rigid salaryman model is eroding and job hopping is on the rise. Marika, in some ways it seems amazing to me that Japanese workers have taken so long to start job hopping. But tell me how widespread this trend is now.
So across Japan, the number of regular workers changing jobs has increased by 60% over the past decade. So that's a significant shift. And a recent survey targeting young employees also showed that only about one in five of them plan to stick to the same employer until retirement. That's much lower than one in three a decade ago. This trend also reflects the country's demographic reality, where the working population is shrinking.
Because so many companies are facing shortages of regular workers, people have more leverage when they choose jobs. But this shift isn't just about demographics, is it? You know, it also speaks to a big change in culture or people's mindset. So the traditional salaryman model emerged during the Showa era or the post-war boom period.
Under this system, loyalty was demonstrated through long hours at the office and also had extensive after-hours bonding. There was even a famous advertisement for an energy drink in the 1980s that asked which is basically a celebration of the dedication of these corporate warriors.
But younger generations have started to question this way of working. Younger people care about spending time with family or they care about work-life balance. And you can see this change in, for instance, the surge of younger men taking paternity leave. Moeka, are lots of people your age now moving jobs or thinking about jobs on a much more short-term basis?
Yes, I think the stigma towards changing jobs has eroded. And for this story, I spoke to a lot of younger workers. I realized some other generational tensions as well. A common complaint kept emerging. And people often talked about what we say in Japanese, which basically translates as old men who don't work. So a lot of younger workers can point to this old guy in their office who is very senior and gets paid well, but basically doesn't do any work.
And in fact, there was a survey showing that half of workers in their 20s to 30s know a働kanai ojisan or a senior slacker at their workplace. I also discovered this funny slang term called Windows 2000. And this is basically a play on these senior slackers' hefty 20 million salary, even as they just linger around the window doing nothing. The problem with these senior slackers is that they don't just
drain workplace morale, but they also tend to clog upper management positions and leave little room for younger workers to advance. These problems have opened up conversations about easing dismissal rules. In Japan, labor laws are very strict and it's much harder to lay people off compared to other countries.
This remains a very politically sensitive topic, so politicians have not managed to implement any significant reform, but the public support is growing. I mentioned younger people's attitudes, but older people's attitudes are changing as well. So it's not just young people, but we've also seen a significant increase in job hopping among workers in their 40s and 50s.
Moeka, presumably this isn't just good for individuals who get to have a more varied career, but there are also economic implications. Yes, you're absolutely right. For a long time, Japan has struggled with stagnant wages and labour mobility or the lack of it. is a major factor behind this. What's interesting in Japan is that unlike in many other countries, when people change jobs, they traditionally expect to get a pay card, not a raise.
And that's because the traditional system values loyalty. Your value at the company is tied to how many years you serve. But this is also starting to change. Recent studies have shown that job hoppers are more likely to see a wage increase compared to even just a few years ago. I also think there's another important aspect. Whenever people change jobs or go to another organization, they tend to bring in fresh ideas or new perspectives. So I think the rise of job hoppers...
but also inject dynamism into Japan's corporate culture. Fascinating. Thank you so much, Mareka. Great to talk to you. Thank you so much, Rosie. You may not know that The Intelligence is now available to listen to on The Economist app. Click on the podcast tab to find our wonderful show and all our other excellent podcasts. You can download episodes to listen offline and without ads.
You'll have to be a subscriber to listen. And if you aren't already, shame on you. Search Economist Podcast Plus for the best offer. Mention Volkswagen and a certain icon might come to mind. But the Beetle isn't the only cult product VW has come up with. The company is also known for another more unlikely item. sausages yes i did say sausages
These days, the factory canteen's Wurst are popular not just with the floor staff, but the general public. And last year, the Volkswagen Group sold nearly as many sausages as it did vehicles. Volkswagen has been making sausages since 1973 and initially really just for their workers. Wendlin von Bredow is our senior Germany correspondent. It was a staple of the corporate canteen. And it is a peculiar German thing. It's a currywurst. So it's a sausage.
Usually a mix of pork and beef with a sauce that consists of tomato paste. curry powder and various spices. which doesn't look very attractive, but tastes quite good. So have you tried one of these first, Wendelin? I have indeed. I tried a vegan VW colorless. It was rather good. And it had original tile written on it, which means genuine part.
the sausages have their own number as if they were a part of a car. So, Vendelin, we're not just sharing news about what we might eat for lunch. Why are we talking about Volkswagen and its curry verse? Last year, VW sold 8.5 million sausages. which is a little bit less than the 9 million cars that VW Group sold. But VW Group includes Audi and Porsche and lots of other car brands.
But VW itself, the VW-branded lorries and cars, they only sold a bit more than 5 million. So the sausages did much better than the VW-branded cars. Wendelin, millions of sausages is obviously an interesting sideline for Volkswagen, but you don't make as much money on a sausage as you do on a car. So how important are they to the group?
Well, for the bottom line, unfortunately, they don't make a huge amount of difference because the price of a sausage and the price of a car is a very different thing. But it's still something. And this curry was considered quite fun. It's not quite like fish and chips in England, but it's become a staple of German food. Tourists who come here, often their first stop is at a currywurst stand to have their first taste of Berlin. So aside from sausages, how has VW been doing?
VW is not doing well. Their profit plummeted by about a third last year. They are really suffering for two reasons in particular. One is very high labor cost and production cost here in Germany. That's in particular labor, but also other high energy costs. And the other is the slump in demand from China. China is VW's most important market by far, most important international market. And as the Chinese economy is ailing, the Chinese buy fewer cars and certainly fewer German cars.
So these two things made for a very difficult year for VW last year. And its first quarter results are out this week, and they're unlikely to be particularly cheerful. So perhaps I'm being overly cynical here. It has been known for companies to change tack and end up majoring in something that was once a sideline. So if sausage sales do overtake car sales overall at VW Group, How would a company best known for its vehicles see that?
Well, they make the best out of it. The board member who announced there will be another innovation. On the currywurst front, he is phrasing the sausage production because it is one line of business that's really doing well. It's not completely novel and not unheard of that a carmaker is very good at doing other things.
It's just slightly comical that it happens to be sausages and in particular the currywurst, which I think is certainly for an international audience a bit of a joke. Wendelin, thank you so much. Great to talk to you. Thank you, Rosie. you that's all for this episode of the intelligence we'll see you back here tomorrow
When you're a forward thinker, the only thing you're afraid of is business as usual. Workday is the AI platform that transforms the way you manage people and money today so you can transform tomorrow. It's how we're moving business forever forward. We're Backmarket, the home of high-quality, affordable, refurbished tech.
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