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Labor reforms come up short for Japan’s ‘precariat’

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Facilitating mobility from non-regular to regular employment is key to sustainable economic growth. This truth was recognized in the revitalization plan announced by the Prime Minister’s Office in 2014, which included specific measures to improve the working conditions of nonregular workers and help them shift into regular employment.

The costs of not doing so are enormous to this “precariat” (precarious proletariat) in terms of thwarted careers, social status, poverty — and isolation, as they have a much lower marriage rate. This in turn is bad news for society because the declining marriage rate is an important factor in the declining fertility rate, meaning fewer consumers and taxpayers in the future, imperiling economic prospects and undermining the solvency of pension and health insurance schemes.

Moreover, the spread of poorly paid nonregular employment to 38 percent of the workforce, from 6 million in 1984 to over 20 million in 2016, is depressing consumption and thus fanning deflation. Firms also invest less in training such workers, lowering productivity.

As eminent Harvard labor historian Andrew Gordon concluded earlier this year in the Social Science Japan Journal, “Expanded nonregular work is arguably more of a poison than a medicine in Japan.”

In 2013 the government passed legislation that targeted the employment instability that plagues nonregular workers on serial fixed-term contracts (yūki koyō) by introducing a system that forces firms to change such employees’ work status to full-time after five years of continuous employment. Typically, nonregular workers sign a succession of one-year fixed-term contracts that carry no legal implications for ongoing employment.........

© The Japan Times