The JIL Labor Flash Vol.10
Email Journal 17.12.2001
Statistical Reports
Main Labour Economic Indicators / TANKAN
Current Topics
First White Paper on Economic and Finance Published ...etc
Public Policies
MHLW Forms Study Group on Male-Female Wage Differentials
News Clippings
Employment Prospects Looking Bleak ...etc
Special Issue
Japan Over the Past Six Months--Editorial Postscript
Statistical Reports
-Main Labour Economic Indicators November 2001-
http://www.jil.go.jp/estatis/eshuyo/200111/econtents.htm
-TANKAN-
Short-term Economic Survey of Enterprises in Japan
-Wednesday December 12, released by the Bank of Japan
http://www.boj.or.jp/en/siryo/stat/tk0112_f.htm
Current Topics
-First White Paper on Economic and Finance Published-
The government-issued White Paper on Economic and Finance has
always drawn keen interest over the 54 years of its publishing life.
Now, though, because the former Ministry of Finance has become part
of the Cabinet Office as a result of the Japanese government's grand
reorganization and restructuring, the scope of the White Paper has
expanded to include financial affairs. The new issue has been renamed
the White Paper on Economic and Finance.
The new White Paper was submitted to a Cabinet council on December 4.
This issue, subtitled “No Growth Without Reform,” pointed out that the
Japanese economy is experiencing moderate deflation, and recommended
that the Bank of Japan take an active part in instituting greater
financial deregulation as well as setting targets for stabilizing the
consumer price index. The White Paper also noted that despite the
billions pumped into the banks for paying off bad debts, banks are
still siphoning funds into unredeemable loans.
The White Paper predicted that the potential growth rate of the
Japanese economy will remain at around the 1% level over the next two
to three years, but if bad debts are paid off, productivity in the
non-manufacturing sector increases, and employment is created through
further deregulation, the potential growth rate over the medium to
long term can be pushed up to around 2%. The White Paper warned that
if the government keeps issuing national bonds despite already being
in debt, and if the nominal bank rate keeps exceeding the nominal
economic growth rate, Japan’s finances will collapse.
The first White Paper on Economic and Finance, as its subtitle
implies, stresses that economic and financial reform is necessary to
trigger economic recovery in Japan.
-Unemployment Rate Reaches 5.4%, Setting a Post-WWII High-
The unemployment rate in October rose 0.1 points over the previous
month, reaching 5.4%, again breaking the post-WWII unemployment record.
Notably, the unemployment rate among men rose 0.4 points to 5.8%,
shattering the previous high as a result of the bottom falling out of
the manufacturing sector. The unemployment rate among women improved
0.4 points to 4.8%.
The biggest surge in the unemployment rate was seen in men and women
aged 35 to 44. Male unemployment rate in this age group rose 0.9 points
to 3.8%; women in the same age group saw their unemployment rate rise
1.1 points to 4.4%.
The number of completely unemployed persons numbers 2.20 million men
and 1.32 million women, a total of 3.52 million persons. The seasonally
adjusted figure for the index of effective labor demand to supply
declined 0.02 points to 0.55, meaning that there are only 0.55 jobs
available for every person looking for work.
The JIL Labor Flash has been following the changes in the Japanese
unemployment rate since it noted in its July issue that unemployment
in Japan had reached 5%, a level unthinkable in the past.The developments
since leave few grounds for expecting a quick turnaround.
Public Policies
-MHLW Forms Study Group on Male-Female Wage Differentials-
The Ministry of Health, Labour and Welfare (MHLW) has formed a
study group on male-female wage differentials to examine why real
differences still exist in the wages that are paid to men and women
despite the improvements that have been made through laws that stipulate
equality, and how such differences can be eliminated.
MHLW has in the past addressed issues such as increasing the percentage
of women presently 2.2% working on the management track (JIL News Flash
Vol.7) or promoting positive strategies to achieve equality between
men and women (JIL News Flash Vol.3). The MHLW seeks, through the
new study group, to address the issue of why women receive only about
half the monthly wages of men (about 60% in terms of working hours)
and why there are no signs of this situation being rectified.
The study group will examine the factors that cause wage differentials,
including the effects of corporate wages and benefits systems, as well
as the measures taken to reduce these differentials. The study group
will also examine the direction that family benefit payments is likely
to take and review legislation designed to address the problem of wage
differences.
The study group will comprise eight experts from a variety of fields,
including university professors and business administrators. Haruhiko
Hori Chief researcher will represent JIL as a member of this study group.
News Clippings
-Employment Prospects Looking Bleak-
The employment picture for high school students graduating next
spring is looking bleaker than ever, with only 37.0% receiving official
employment offers, the worst figure ever for a survey conducted at
this stage(MHLW survey on September 30). The recession is causing
companies to switch to part-time employees or temporary staff instead
of hiring new high school graduates.
A general affairs manager for an industrial prototype manufacturer
said that the company can no longer afford the luxury of assigning
employees who could be productive elsewhere to the lengthy process
of training new recruits. The Editor-in-Chief of the Shushoku Journal,
a job information magazine, pointed out that other than workers who
will ultimately become managers, companies are turning to part-time
workers, temporary staff, and subcontractors, and that work previously
done by high school graduates is being taken over by university graduates.
(Yomiuri Shimbun, November)
-Cabinet Office Study Finds that University Students Abhor Study-
In September, the Cabinet Office conducted an interview survey of
6,000 persons nationwide aged 9 through 24. According to this “Basic
Study on the Lifestyles and Awareness of Young People,” 47.5% of
university and graduate school students do “almost no” study outside
the classroom previous survey, 38.5%.
According to this study, the percentage of people who wish to become
ordinary company workers, public service employees, or teachers declined
in all age groups 15 or over whereas the percentage wishing to become
artists, designers, and novelists -work that gives an impression of
freedom-increased. The percentage of people who have no intention of
finding a job increased to 7.6% among persons aged 18 through 24.
The survey also showed that young people are taking less interest
in the society around them. The Cabinet Office is worried that more
young people are turning inward and are taking an interest only in
their immediate lives.
(Sankei Shimbun, November)
-Banking Majors Reduce Directors' Retirement Benefits-
Twelve major banks receiving public money for paying off bad debts,
including the Mitsui-Sumitomo Bank, the UFJ Group, and the Mizuho Group
(but not including the Bank of Tokyo-Mitsubishi and Mitsubishi Trust
and Banking, which have already paid back their infusion of public funds
they received) will cut their directors' retirement benefits by up to
50% and will request former directors to return a part of the benefits
they have received.
The banking majors plan to proceed with further measures to pay off
unredeemable loans following special auditing by the Financial Services
Agency, and will see their equity capital decline as a result. The cuts
in retirement benefits to directors will enable the banks to cover at
least part of their decline in equity and express their commitment to
taking responsible action to rectify the management mistakes of the past.
(Mainichi Shimbun, November)
Special Issue
-Japan Over the Past Six Months---Editorial Postscript-
In April of this year, a new government, headed by Prime Minister
Koizumi, emerged out of the crumbling edifice of 50 years of post-WWII
Japanese prosperity. He was elected on the understanding that he would
implement the reforms considered absolutely necessary for jump-starting
the Japanese economic engine.
The new government, already up to its neck in problems, was forced
to weather the double blows of the fallout from the September 11
terrorist attacks on the United States and the BSE (“mad cow disease”)
debacle within Japan, which undermined the efforts being made to encourage
economic recovery.
As we have reported over the last six months, the Japanese economy
is already suffering from or is in the danger of suffering from the
effects of a negative chain reaction of events that threaten to topple
the economy.
It is extremely unclear how the country can put a stop to this vicious
circle of economic events, which began with the collapse of the IT
bubble in the summer and the resulting losses in the manufacturing
industry, which forced the manufacturing majors to undergo large-scale
labor force reductions and salary and bonus cuts, which in turn dampened
consumer spending, which forced companies to cut production and reduce
facilities investment.
The past six months have seen people’s concerns over employment
and their welfare grow. Coincidentally, six months is also the age
of this newsletter: the JIL Labor Flash has been able to provide
real-time tracking of events as they have unfolded.
The JIL Labor Flash will continue next year to provide fresh insights
and viewpoints into the Japanese labor market and the role played by
governments and labor-management representatives.
This is the last issue of the JIL Labor Flash this year. Our next
issue will be issued in mid-January 2002. We look forward to communicating
with you then.
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