Vol.39-No.1 January 1,2000
According to the Management and Coordination Agency, the unemployment rate in September (seasonally adjusted) was 4.6 percent, 0.1 percentage point down from the previous month. This was the second successive monthly improvement. However, there is still a strong feeling among enterprises that further restructuring will occur. Such perceptions have been re-enforced by the massive job cuts announced by Nissan Motors Co., Ltd. The Ministry of Labour maintains its view that, although there are some signs of improvement in the employment situation, firms are still restricting their hiring of new graduates, and it is too early to conclude that the labor market has turned around.
On November 11, 1999 the Cabinet ministers concerned with economic policies met and unveiled an economic stimulus package to put the economy on a full recovery track. The ¥18 trillion package includes ¥1 trillion for employment policy measures. In accordance with this announcement, the government will submit a second supplementary budget to an extraordinary session of the Diet.
Key facets of the employment package to create jobs and stabilize employment are the encouragement of business start-ups and support for management in small- and medium-sized firms. For instance, the Ministry of Labour will establish "special subsidies" for job-creation in small- and medium-sized firms in local areas. At the same time it will set up service centers for human resources in new and growing industries. Another type of grant will be made available to firms which create jobs in designated areas and for workers losing their jobs with subcontractors.
The special subsidies for job-creation in small- and medium-sized firms and in designated areas are designed to help workers become re-employed when they have lost their jobs with subcontractors or associated companies due to the restructuring of major firms, such as Nissan. The subsidies are in line with the tough situation revealed by a monitoring survey conducted by the Ministry of Labour. The survey was administered to 41 firms adjusting or planning to adjust their employment levels by a thousand or more jobs. Based on the survey, it was estimated that 140,200 jobs (equivalent to 12% of all employees) will be shed by the 41 firms between 1996 and 2005.
The subsidies will be granted to subcontractors and to firms which come under pressure to reduce their workforce when the large enterprises with which they have strong ties carry out large-scale restructuring which will result in closing factories and other measures. Such firms will be recognized as "designated enterprises" by the Ministry of Labour. Business firms which employ workers who have lost their jobs due to restructuring measures will be subsidized to the extent of about ¥100,000 per worker for a maximum of six months, regardless of age, type of job or other such factors. Of the \1 trillion proposed expenditure for employment measures to be submitted to the extraordinary session of the Diet, ¥32.1 billion will be allocated for this subsidy.
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