Ja­pan to en­hance pay for con­tract work­ers

Kuwait Times - - BUSINESS -

TOKYO: Ja­pan’s gov­ern­ment has placed a high pri­or­ity on nar­row­ing the gap in pay and ben­e­fits be­tween reg­u­lar and con­tract em­ploy­ees as this will raise pro­duc­tiv­ity and con­sumer spend­ing, said Kat­sunobu Kato, min­is­ter for la­bor mar­ket re­form. Com­pa­nies can af­ford to nar­row the pay gap with­out cut­ting salaries for reg­u­lar work­ers, be­cause com­pa­nies have enough prof­its and re­serves to in­crease la­bor’s share of prof­its, Kato told Reuters.

The gov­ern­ment will tackle Ja­pan’s no­to­ri­ously-long work­ing hours by set­ting lim­its on over­time that could be sub­mit­ted to par­lia­ment some­time next year, he said. A panel that Kato leads will com­pile guide­lines on nar­row­ing the pay gap to­day, which is a cen­tral plan of Prime Min­is­ter Shinzo Abe’s labour re­forms to end decades of stag­nant growth and de­fla­tion.

“Wages are a big mo­ti­vat­ing fac­tor. Peo­ple want to feel they are be­ing eval­u­ated for their work and re­warded based on their work,” Kato said. “On a macroe­co­nomic level, im­prov­ing pay gives more peo­ple the chance to work and im­prove their pay, which feeds into higher con­sump­tion.”

The gov­ern­ment, at the be­hest of large com­pa­nies, be­gan pro­mot­ing con­tract and non-reg­u­lar worker sta­tus in the 2000s as a way to lower per­son­nel costs and pre­serve jobs dur­ing a pro­longed eco­nomic slump. Since then, the num­ber of con­tract work­ers has swelled to around 37 per­cent of the work­force, and crit­ics say this has cre­ated a twotiered la­bor mar­ket be­cause con­tract em­ploy­ees re­ceive con­sid­er­ably less pay and ben­e­fits.

Abe turned his at­ten­tion to la­bor mar­ket re­form ear­lier this year to re­vive his struc­tural re­form agenda, a move which economists ge­nially wel­comed. The de­bate has taken on an added sig­nif­i­cance af­ter the sui­cide of a re­cent col­lege grad­u­ate who worked more than 100 hours of over­time at the coun­try’s top ad­ver­tis­ing agency pre­ced­ing her death.

The gov­ern­ment’s min­i­mum thresh­old for death by over­work is 80 hours of over­time per month, which is ex­ces­sive and con­trib­utes to long work­ing hours, Kato said.

It is too early to put an ex­act num­ber on the over­time lim­its the gov­ern­ment will set, but Kato hopes to reach a con­clu­sion by March and said it is pos­si­ble that lim­its could dif­fer per in­dus­try.

Im­prov­ing work­ing con­di­tions has been a long-over­due task be­cause the work­ing-age pop­u­la­tion is shrink­ing and Ja­pan’s pro­duc­tiv­ity in the ser­vices sec­tor is low by most in­ter­na­tional com­par­isons.

Abe’s la­bor re­forms have al­ready raised the min­i­mum wage and made com­pa­nies more ac­count­able for im­prov­ing con­di­tions for work­ing moth­ers. Abe is also look­ing at en­cour­ag­ing more telecom­mut­ing and at at­tract­ing more high-skilled for­eign la­bor. —Reuters

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