WORKING CONDITIONS AND THE LABOR MARKET
Vol.35-No.04 April 1,1996
Number of Regular Workers Posts First Decline in 20 Years
The number of regular workers at firms with 30 and more employees was 2,341 million, down 0.6 percent from a year earlier, according to a preliminary report on 1995 of the Monthly Labor Survey released by the Ministry of Labour. The figure represented the first year-on-year drop in the 20 years since 1975, following the first oil-supply crunch. It also showed that the decline in the number of workers was due to restrictions on new hires and other such reasons.
-Preliminary Report of 1995 Monthly Labor Survey-
A look at the rate of change in regular workers in major industries in 1995 shows that their number fell 1.9 percent from the previous year in manufacturing. The decrease was notably large in textiles. The number of regular workers shrank 1.0 percent in wholesale and retail trades and eating and drinking establishments, while they sagged 1.2 percent in finance and insurance. Services witnessed a 1.1 percent rise in the number of regular workers. Regarding the labor turnover rate by industry, in manufacturing the rate of new hires stood at 1.14 percent, down 0.02 point from the previous year, while the rate of job separations stood at 1.35 percent, up 0.03 point over the year before. On the other hand, the rate of new hires was 1.95 percent and that of job separations 2.11 percent, with both staying the same as the previous year, in wholesale and retail trades and eating and drinking establishments. In services, the rate of new hires was 1.91 percent, down 0.10 point, while that of job separations was 1.87 percent, down 0.08 point from a year earlier.
Meanwhile, total annual hours worked per regular worker stood at 1,909 hours, an increase of 5 hours over the year before, representing the first such rise in the eight years since 1987. By industry, they stood at 1,968 hours (up 0.5% over the previous year) in manufacturing, 1,762 hours (down 0.5% from a year earlier) in wholesale and retail trades and eating and drinking establishments and 1,836 hours (up 0.4% over the year before) in services. The Ministry of Labour ascribes the first increase in total annual working hours in 8 years to "less eagerness to reduce working hours resulting from a recession which would increase costs."
Corporate Support for Job Change and Going Independent
With the average age of the work force rising, recession-battered corporations are hard pressed to bear the heavy burden of personnel costs. Among middle-aged and senior white-collar workers who have become the target of restructuring, many abandon corporate life to work on their own. In addition, some firms have established a system for helping middle-aged and elderly employees find new jobs. Examples follow.
East Japan Railway Company, with more than 80,000 workers as of April 1994, launched in 1993 a "New Life Plan With Paid Time Off " intended to rectify the unbalanced age structure of its workforce - 30,000 employees in their 40s as against 3,800 in their 20s. Under the System, the 55-year-old worker is offered four retirement options to choose from as he wishes, including (1) continuing to work at the present job until age 57; (2) paid time off for two years and retirement at 57; (3) an early-retirement package effective at 55; and (4) temporary transfer to subsidiaries or related firms. When the worker continues to work until 57, he will be offered 3 options: first, paid time off for two years and retirement at 59; second, a lucrative early-retirement package effective at 57; and third, secondment to subsidiaries or related firms until 60. The company will pay workers on leave 85 percent of their salaries for the 2-year period. More than 600 have chosen these options to date.
Nippon Steel Corp.'s "Special Vacation System" is targeted for union members 45 years or older. The employee can take a 1-year long vacation on condition that he will retire after finishing his paid time off. He will be offered 80 percent of his last salary immediately before taking vacation. What is more, he will have his paid time off computed in the ordinary retirement allowance. More than 100 employees have taken advantage of this offer in the 5-year period from 1989.
In March 1994, Nihon Unisys Ltd. created a program that supports new career options, with the following options. First is tenseki, or transfer to a subsidiary, for employees aged between 50 and 55 and the chance to extend employment there till 63. Second is the chance to find re-employment at a related firm for employees between the ages of 50 to 55 that would provide at the time of retirement 50 percent of the difference in annual income between the parent company and the related firm for the period till retirement. Third is the chance to find another job at a local subcontractor for employees aged between 48 and 58 that would provide as a special payment 50 percent of annual income at the time of retirement. Fourth is the chance to start a business for 55-year-old or younger employees who have worked for the company 20 years or more. Such former employees would receive support from the firm through business when the field is related to the firm's.
These support programs for middle-aged and senior employees are a method to cut payroll costs while also helping those who are considering going independent.
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