Labor white paper

Mainichi Shimbun, editorial, 3 July 1999

We have entered an era of high unemployment, and there is little likelihood that the situation will improve in the short term. This has serious implications for labor practices that are premised on long-term service with a single employer. The impact of these trends is especially grave for the 53 million people in this country who work for companies, and this is the central theme of the 1999 white paper on labor, which was submitted on Friday by the Ministry of Labor.

The white paper maintains that greater labor mobility will become unavoidable in the years to come, and it contends that the immediate issue will be ensuring a smooth transition of workers to new employers and stabilizing the labor market. The social costs incurred as middle-aged breadwinners lose their jobs will be high. Not only will personal consumption decline, but tax revenues and social-insurance premium payments will decrease. There will be psychological costs, too. The number of suicides among middle-aged salaried workers has risen markedly, pushing the figure for all suicides above 30,000 for the first time.

In its analysis of the current job situation, the white paper points to changes in corporate employment patterns. The number of those who work for companies fell in 1998 for the first time on an annual basis. The decline was most noticeable in the manufacturing and construction sectors. Jobs are being slashed despite the fact that corporate earnings have not been hit as hard as they were after the first oil crisis in the 1970s or the bursting of the economic bubble in the early 1990s. Many leading firms have already unveiled restructuring plans. Although ostensibly aimed at reorganizing operating structures, these initiatives are actually aimed at reducing the number of superfluous workers—a perception that is corroborated by the findings of the white paper.

For the first time, this year's white paper recognizes the disadvantages of the practice of long-term employment, noting that it may hinder the smooth revamping of industrial structures. But it also stresses the advantages, going so far as to claim that only when there is job security are workers motivated to make bold challenges that lead to technological breakthroughs and new ventures. We agree that the practice has advantages that should not be squandered. Even though the U.S. jobless rate has fallen significantly, this was accomplished only after a heavy shifting of labor. Every country has employment practices that best suit its social climate and safety nets.

However, it is obvious that traditional employment practices are falling by the wayside regardless of their merits as it becomes increasingly difficult for companies to shift workers and jobs. This inevitably raises the question of how labor mobility can be achieved without sacrificing stability.

The white paper emphasizes the importance of acquiring vocational skills that can be used at various employers. While measures to enhance such employability are necessary, they are not enough. More important is the creation of a labor market in which switching employers does not place a worker at a disadvantage in terms of pay, severance pay and pensions. Another issue is improving the conditions for part-time and temporary workers. Only when the public and private sectors draw their strengths together will we achieve a society in the 21st century with an employment market that is both stable and mobile.