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What is often seen in the United States is a series of lay-offs, and often older employees are pressured into early retirement. When positions need to be filled, lower salaried younger workers are employed. Due to the traditions of the Japanese business culture, this is not the method of choice.
Traditionally Japanese firms grant promotions and raises based on loyalty to the company, rather than a merit based system as in the US. As such, from a financial standpoint, it would seem even more reasonable to use the US approach. However, the sense of loyalty to the elder employees is too strong for this to be the immediate course of action...
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