New Trends Recently Observed

It has been a long time since the mass labor-shedding of middle-aged or elderly workers and the cessation of basic pay hikes customarily carried out every year, together with the difficulties of young workers in getting jobs, began to make the headlines. Now, however, things seem to be changing.

First, where basic pay hikes are concerned, although Nippon Keidanren (the Japan Business Federation) has been skeptical about the practice of basic pay hikes itself, a survey addressed to high-ranking managers on the 2006 spring joint labor negotiations showed that the proportion of firms giving only periodical pay raises decreased, whereas the proportion of those raising wages including basic pay hikes increased substantially from the previous survey, to 23.5 percent.

Second, as for changes in the employment of young people, the labor market has become a sellers' market over the last two years, and the results of a Survey on Employment Conditions of Young Workers at Firms published at the end of August by the Ministry of Health, Labour and Welfare indicate that the proportion of workers under the age of 30 to regular employees as a whole, as of October 1, 2005, stood at 22.1 percent (14.9 percent among males, and 7.2 percent among females). The survey also shows that as many as 36.4 percent of the firms surveyed responded that in the coming three years they would increase the hiring of young workers as regular employees compared to the past three years.

The findings of a survey released around the same time by Nippon Keidanren also show that about 80 percent of the firms surveyed felt that they had an insufficient number of young regular employees. The same survey also found that some 70 percent of the firms surveyed are eyeing the possibility of hiring "freeters" as regular employees. Needless to say, behind such corporate moves lies the recovery of business performance in recent years and the mass retirement of baby boomers expected in 2007.

Even so, firms do not necessarily accept such young workers without reservations. Where employment of "freeters" is concerned, in particular, 24.3 percent of firms responded that they would not hire any, and 64 percent that they were reluctant to hire them, but might do so depending on the experience and ability of individual "freeters", while a mere 1.6 percent took a positive stance towards employment of them (Nippon Keidanren survey). Although government authorities have also expressed the intention to launch proactive measures to encourage employment of young workers, it seems the problem will be fairly difficult to solve.

In the meantime, slight changes have been seen in the number of live births: a preliminary release of statistics by the Ministry of Health, Labour and Welfare shows that the number of births in the first half of this year totaled 549,255, an increase of 11,618 on a year-to-year basis, the first increase in six years. The Ministry states that if this trend continues, the birthrate may turn around in 2006.

It will be interesting to see how the pendulum will swing from this point on.