The JIL Labor Flash Vol.8
Email Journal 15.11.2001
Statistical Reports
Recent Statistical Survey Reports
Current Topics
Focus of Next Year's "Shunto" on Jobs, Not Raises ...etc
Public Policies
Establishment of a Childcare Leave System ...etc
News Clippings
Kirin Establishes New Company that Hires Former Workers ...etc
Special Issue
Worst-Ever Unemployment Rate and Introduction of Work Sharing
Programs
Statistical Reports
-Recent Statistical Survey Reports October 2001-
Features
Survey of the Working Life (2001)
General Survey on Labour Conditions
Labour Force Srvey (September)
Special Survey of the Labour Force Survey (August) ...etc
http://www.jil.go.jp/estatis/e2001-10.htm
Current Topics
-Focus of Next Year's "Shunto" on Jobs, Not Raises-
In October, Japan Trade Union Confederation (Rengo) decided that
the organization will seek to "maintain the present salary curve"
(and possibly obtain additional benefits) at the Spring 2002 "Shunto"
wage negotiations. This decision marks the first time Rengo has not
set a coordinated across-industry numerical target for basic salary
raises. Rengo's decision, which was made with difficulty, reflects
the growing differences in the performances of firms in different
industries and the tightening job market.
In the electrical and electronics industry, announcements of mid
-term losses by the six majors (Matsushita 265 billion yen, Hitachi
230 billion yen, etc.) has forced the Japanese Electrical, Electronics
& Information Union (membership 720,000)-which has traditionally led
Rengo talks-to forego seeking a basic salary increase.
The Japanese Federation of Iron and Steel Workers' Unions (membership
150,000) has made a similar decision: to make job security the chief
issue at next year's talks with employers. This marks the first time
in 15 years (since the post-Plaza Accord recession of 1987) that the
federation will not seek basic salary increases.
The chairman of the Japan Iron and Steel Federation hinted at a
press conference held in early November that increased international
competition will mean that employers must move more cautiously in
signing the employment security agreement.
It is possible that other union federations will also forego making
basic salary increase demands at next year's Shunto negotiations,
making the present developments doubly significant.
-The Shrinking Japanese Trade Surplus-
Gone are the heady days of the 1980s when Japanese trade surpluses
surged upwards, fueling trade friction with the United States and
other countries. First half trade figures for this fiscal year saw
Japanese trade surpluses decrease by 43% compared with the same period
last year (source: October trade statistics, Ministry of Finance).
The causes of this decrease include decreased exports resulting from
a worldwide economic slowdown, decisions by the major electronics and
automobile manufacturers to shift their production centers overseas,
and increased export competition coming from China and other countries.
Because these causes of Japanese export declines are structural, it
is expected that Japanese trade surpluses will continue to fall,
creating fears of loss of employment opportunities and placing downward
pressure on the yen in the financial market, and on the Japanese economy
overall.
Public Policies
-Establishment of a Childcare Leave System-
The government proposed the first large-scale revision of the Childcare
Leave Law, introduced in 1991, at the latest parliamentary session.
The revised Childcare Leave Law will come into effect beginning April
2002.
The most significant change in the revision prohibit firms and employers
from disadvantaging employees who apply for or take childcare leaves
and obligate them to establish a system that allows fathers and mothers
to take short-term childcare leave to care for children under primary
school age who come down with a sudden illness or injury. The Democratic
Party of Japan also demanded that workers be given the right to take
more than 10 days of childcare leave per child (maximum of 15 days of
leave). A compromise that was worked out saw the inclusion of a provision
to review the revised Childcare Leave Law three years from now.
The revision also stipulates that both male and female workers will
have the right to refuse any work exceeding 24 hours of overtime a
month and 150 hours of overtime a year even if they have signed an
agreement stating that they are willing to work overtime. It also
loosened the conditions under which workers can choose to work
shorter hours instead of taking blocks of childcare leave. At present,
only workers caring for children under one year old may take advantage
of this stipulation. The revision allows workers caring for children
under three years of age to do the same.
-Government Pumps an Additional Trillion Yen into Employment Measures-
The government has set aside approximately one trillion yen for
additional spending on employment measures (including spending by
prefectures and municipalities) in this year's supplementary budget,
scheduled to be approved in mid-November. Besides 294 billion yen in
additional unemployment benefits, the government seeks to spend its
budget on better reemployment support, improved private-sector job
search and referral systems, and increased skills development support.
Specific measures that the government plans to introduce include
setting aside 76.1 billion yen in welfare loans (up to 200,000 yen a month)
to formerly self-employed persons and making 350 billion yen available
in the form of "special emergency regional employment subsidies"
designed to increase employment of teachers and other public services
workers, including forestry workers. Through these measures, the
government seeks to create 500,000 additional jobs.
As the economy continues its downward spiral, it is becoming more
and more critical for the country to determine whether Prime Minister
Koizumi is capable of going through with his reforms for balancing the
budget, disposing bad bank debts, and establishing employment safety nets.
News Clippings
-Kirin Establishes New Company that Hires Former Workers-
Kirin Brewery (Yokohama Factory) says that it hopes to establish
a company next spring that includes former factory workers who have
retired from their jobs. By hiring former workers who are knowledgeable
about factory processes, Kirin hopes to make work more efficient and
cut costs. The Yokohama Factory currently employs 350 part-time and
outside workers; Kirin hopes that rehired workers can account for
about 100 of these workers.
According to Kirin's Yokohama Factory spokesman, about 10-20 workers
retire every year. However, many show a willingness to work past
retirement age, and former workers are strongly loyal to the company;
thus the arrangement should be beneficial to both the company and employees.
Details regarding the number of employees at the new company and
how much they will be paid are still undetermined. The president of
the new company will also be a former Kirin factory employee.
(Nikkan Kogyo Shimbun, October)
-Matsushita to Introduce Merit System for Retirement Allowance Payments-
The Matsushita Group (five companies) has decided to review its
retirement allowance system. As it stands at present, allowances are
paid according to the number of years a worker has been employed.
In the new system, the Group seeks to link workers' retirement allowances
to their past performance. Matsushita has already begun negotiating with
labor unions with the aim of implementing the new system for employees
retiring next April and beyond.
In the current system, the company pays out retirement allowances
in proportion to the number of years an employee has worked for the
company and the salary that the employee was paid immediately prior to
retirement. In the new system, the company will calculate retirement
allowances individually as a percentage of an employee's total lifetime
salary plus interest. In both cases, retirement allowances are paid from
a fund set up by the company. Employees can receive their retirement
allowances either as a single lump sum or in installments. Because
salaries are calculated according to performance, the better the employee
performs, the greater the baseline from which retirement allowances
are calculated, and the greater his/her retirement pension will be.
(Nihon Keizai Shimbun, October)
Special Issue
-Worst-Ever Unemployment Rate and Introduction of Work Sharing Programs-
The unemployment rate for September rose 0.3% from the previous
month to reach 5.3%, the worst unemployment rate in post-WWII Japanese
history. Because the recession in the IT industry has caused firms in
the industry to slash their workforce and because the number of
non-voluntary unemployed is increasing, it is unlikely that the
unemployment rate will make a quick turnaround.
For this reason, the Japan Federation of Employers' Associations
(Nikkeiren) and Rengo announced a joint Social Agreement on Employment
in October to "work towards establishing a consensus for more employment
variety and work sharing programs to maintain current employment and/
or create new jobs." The two organizations will establish a study
committee by March 2002 to come up with specific measures that may be
implemented.
Despite the agreement, Nikkeiren and Rengo differ significantly in
their views on work sharing. Whereas Nikkeiren favors the use of older
workers and part-time workers as a solution for keeping personnel
costs down and improving management efficiency, even as the number
of workers decreases, Rengo favors maintaining current employment
evels and/or creating new jobs by cutting real working hours.
Furthermore, before introducing work sharing programs, there is
a need to defuse suspicion on both sides. Companies believe that
work sharing programs lower productivity; labor unions, particularly
small and medium unions, believe that such programs lead to lower wages.
Interest in work sharing programs-initially the German model and
now the Dutch model-has always been high in Japan, but there has been
little discussion of such programs. It will be interesting to see if
the new agreement will lead to much-needed debate.
Declaration of Mutual Agreement to Promote "Social Agreement on Employment"
http://www.jil.go.jp/english/archives/emm/2001-2003/2001/vol.8/employment.html
