Vol.37-No.09 September 1,1998
On July 7, 1998, the Ministry of Labour submitted its 1998 White Paper on Labor to the Cabinet meeting for publication approval. This year's white paper analyzes trends in Japan's labor economy in 1997 in Part I. Part II, which is titled Mid- and Long-Term Changes in Working Styles and Lifestyles provides an overview of the economic and employment situation in the period of stable growth. It considers how the way people work is changing, and the transitions that are occuring in life styles, employment patterns, working life and working conditions and lifestyles. It also discusses measures that might be taken in order to respond flexibly to the structural changes in society that are expected to occur more rapidly in the years ahead, and to the steps that might be necessary to sustain the vitality of the Japanese economy.
Employment was high but improved in the first half of 1997, before
deteriorating in the second half. In March 1998, the unemployment rate was
3.9 percent, the record highest.
(1) Unemployment: In 1997, the seasonally adjusted unemployment rate rose to 3.5 percent in the October to December quarter, up from 3.3 percent in the January to March quarter. In the January to March quarter of 1998, it rose further to 3.6 percent, the highest quarterly rate. The rate continued to climb every quarter and averaged 3.4 percent for 1997, the same level as in 1996 (see Figure 1). The rising unemployment reflects the decreased demand for employment as business conditions deteriorate.
(2) The Ratio of Active Job Openings to Active Job Applicants: The ratio of active job openings to active job applicants remained stable through the July to September quarter, but declined in the next quarter, when the number of new job seekers decreased and the number of new job offers increased. In January to March 1998, the ratio stood at 0.61, a figure comparable to that recorded in the October to December 1986 quarter (Figure 1).
(3) Number of Employees: Mirroring the nations'stalled economy, which slowed further, the number of employees grew very slowly in the July to September 1997 quarter. In particular, the number of male employees barely grew at all, and even declined in the January to March 1998 quarter.
|Source:||Ministry of Labour, Statistics on Employment Security, Statistics Bureau, Management and Coordination Agency, Labor Force Survey.|
|Note:||Figures for the unemployment rate in the graph are given as quarterly values and are estimates provided by the Labour Economy Affairs Division, Ministry of Labour.|
(1) Wages: In 1997, total cash earnings of employees in establishments with five or more employees were up 1.6 percent from the 1996 level, above the 1.1 percent growth rate recorded in 1996. Compared with the preceeding year, real wages were lower over the year due to a rise in consumer prices stemming from the April 1997 hike in the consumption tax. Consumer prices rose 1.1 percent in 1997, the same as in 1996.
(2) Working Hours: In 1997, average annual hours of work at firms with five or more employees stood at 1,891 hours, 1.4 percent down from the previous year, due to the decline in standard hours of work as the 40-hour workweek came to be standard across all industries. This was the first time that average annual working hours have been below 1,990 hours.
(3) Industrial Accidents: The number of industrial injuries (deaths and injuries requiring the absence of four or more days from work) continued to decline in 1997. The total number of such incidents was 156,726, a decrease of 6,136 (3.8%) from the previous year. The 2,078 deaths were 285 (12.1 %) below the number in 1996.1.3 Chapter 3 Trends in Prices and Workers'Household Consumption Expenditures
(1) Prices: Consumer prices (general) rose by 1.8 percent in 1997. However, they were mostly stable after posting a large stepped increase in April owing to the consumption tax.
(2) Workers'Household Expenditures: In 1997, the annual income of workers' households rose 1.1 percent in real terms, below the growth rate recorded in 1996. Workers'households real expenditures were up 0.1 percent from 1996.1.4 Chapter 4 Trends in Industrial Relations
(1) The 1998 spring wage negotiations resulted in labor and management settling on a lower wage increase than in 1997. Both the amount of the increase and the percentage increase were smaller. Wage increases agreed upon by major industrial unions were as follows: steel industry 1.73 percent, electrical-machinery industry 0.51 percent (this figure does not include regularly scheduled raises and is based on the average 35-year-old worker), and automobile industry 2.78 percent.
(1) Changes in Economic Structure, etc.: Dramatic changes in working styles and workers'lifestyles have ocurred against the backdrop of various structural changes in the economy. Those changes include internationalization and informationalization, the greater weight of services in the economy overall, changes in the supply of labor (e.g., the aging population, women's progress in the workplace and higher educational levels), and changes in the personnel systems that affect the labor market and working conditions.
(2) Changes in Employment Structure and Labor Mobility: The number of workers in the tertiary industry, particularly in services, has grown. More workers are taking white-collar jobs. Labor mobility is increasing as the proportion of part-timers in the labor force grows. However, regular workers, particularly middle-aged and older male core workers, have yet to start shifting jobs in large numbers.
(3) Unemployment on Upward Trend: The unemployment rate is on a long-term upward trend. However, the rate for male middle-aged workers and household heads is rising slightly while that for young and older male workers is growing sharply. In addition to the rise in the balanced unemployment rate, the unemployment rate due to lack of demand has remained at a high level until recently.
(4) Tasks for Stable Employment: In the future, Japanese society will be characterized not only by its older population but also by the small number of children (Figure 2). Policies appropriate for such a society need to be put into place. While maintaining employment levels within firms, some sort of safety net will be needed along with a mechanism to balance the demand functions, premised on corporate efforts to maintain jobs.
|Source:||Figures from 1995 and before are from the Statistics Bureau, Management and Coordination Agency, Labour Force Survey. The figures for 2000 and beyond are estimated by the Employment Security Bureau, Ministry of Labour (June 1997).|
(1) Diversifying Employment Patterns: Employment patterns diversified further for young people, middle-aged women and elderly men. Also, while the number of the self-employed, family workers and home workers decreased, those employed in new employment categories (e.g., as dispatched workers) are increasing.
(2) Changes in Hiring Strategies and Personnel Management Systems: The tendency of firms to stress the hiring of new school graduates and younger people remains unchanged; however, their hiring strategies are diversifying as the active utilization of part-timers, temporary workers and mid-career people becomes more established. With the ageing of the population and higher educational levels, the ratio of those engaged in management posts is rising. However, the competition for promotion is shifting across education and age groupings. In particular, those baby boomers born from 1947 to 1949 and those born afterward are having to wait longer for promotion than the generation before them. Finally, firms are moving to diversify and to individualize their personnel management policies.
(3) Career Development, Vocational Training, Employment Tenure and Retirement: Those in management and clerical jobs tend to stay in their positions for increasingly shorter periods while those in professional, technical and research jobs are tending to stay in their positions longer. Firms seem to be moving to develop broader career paths for those in managerial positions. In vocational training, both enterprises and workers seem to be putting more emphasis on self-enhancement. The length of employment with the same firm seems to be growing for both men and women, and it is longer for those in the older age bracket. Enterprises and workers both seem to want long-term employment at the same firm. While the compulsory age for retirement is moving up to beyond 60 at a growing number of firms, the flexible retirement system is also becoming more common.
(4) Wages and Retirement Allowances, and Working Hours: Wages have been seniority-based, but an overhaul of the wage system is now occuring. This will affect all workers, including those born immediately after the war (who are now in their early 50s). The wage system is becoming more ability-based or performance-based (Figure 3). Employees, however, harbor fears about the accuracy with which their ability or performance is evaluated. The wage disparity between large and small enterprises is narrowing except for such factors as ageing workers and higher educational levels. Working hours have dropped sharply following the revision of the Labour Standards Law in 1988.
|Source:||Employment Problems Research Institute. Survey of the Changes in the Economic and Social Environment and Customary Japanese Hiring Practices (1985). Japan Institute of Labour, Survey on Professional Policy Systems and Occupational Consciousness under Structural Adjustment (1998).|
|Notes:||1)||On the 1985 survey, it wasWill increase the ability element in basic compensation.|
|2)||Item appearing only on the 1998 survey|
|3)||Multiple responses allowed|
(5) Welfare Provisions and Work Environment: The increase in statutory welfare costs is remarkable; however, non-statutory welfare costs have not risen much. The gap between large and small enterprises remains large. Policy measures for welfare provisions are diversified and individualized to meet a variety of needs. The push for efficiency is also a major concern. The number of deaths and injuries continues to decrease in overall terms, but the number of deaths has leveled off in recent years. The proportion of employees feeling fatigue and stress is rising.
(6) Directions of Changes in Working Styles and Challenges for the Future: With more emphasis being placed on individual differences and on maximizing the ability of employees to take the initiative at work, it is essential that firms change the way people are organized to work to maintain long-term employment. Firms will need to allow employees to select the working styles and to come up with new ways to evaluate their employees (Figure 4). Also, it will be necessary to develop adequate policies for middle-aged and older employees. In order to develop new arrangements to accommodate these kinds of change, labor-managament and the government all have an important role to play.
|Source:||Japan Institute of Labour, Survey on Personnel Policy Systems and Occupational Consciousness under Structural Adjustment (1998).|
|Notes:||Responses to a question about which priority would yield higher results;|
|(1)||emphasizing individual autonomy, or|
|(2)||emphasizing cooperation and harmony within the organization|
(1) Changes in Consumption Behavior: Income and consumption expenditure by workers'households have increased since 1975. Entering the 1990s, however, income has grown only moderately and real consumption has leveled off. The average propensity to consume has fallen, however, due to households being squeezed by increases in insurance premiums and repayments on housing loans. The greater sense of uncertainty following the collapse of the bubble economy in the 1990s has also been a factor. Savings have been growing, and the subscription to life insurance schemes has grown remarkably. Household liabilities, on the other hand, were up. They include mortgages on housing and land, liabilities that have become a pronounced burden for many middle-aged workers.
(2) Changes in Lifestyle: Due in part to the spread of the five-day workweek, people work less and have more free time on the weekends. The uses of time by working women undergoes dramatic changes as they shift from being single to getting married and then to having children. The time women and men spend on domestic chores is characterized by a widening gap.
(3) The Changing Awareness of Workers and Issues for Sustaining Their Lifestyle: In order to sustain the lifestyle of employees in the years ahead, it is necessary that the sense of economic uncertainty be diminished. A vision of life in graying society (Figure 5) is also necessary. It is also essential that consumer prices be lowered through the process of reducing the gap between the domestic price and the overseas price for similar goods. Steps to guarantee each employee's free time are also essential to transform the company-centered lifestyle, the way in which society and enterprises are organized and the workers'own way of thinking about such matters.
|Source:||Prime Minister's Office, Survey of Life of the Nation|
previous page next page MENU Summary of White Paper on Labour Index