PERMANENT HIRING RISING
Shift back towards regular jobs may lead to pick-up of sluggish consumer spending
JAPAN’S tightest labour market in decades shows signs of reversing a long shift towards the hiring of temporary workers.
The number of full-time workers is rising for the first time since the global financial crisis, outpacing growth in temporary jobs over the past two years.
“The labour shortage has become so bad that companies can’t fill openings only with parttimers,” said Junko Sakuyama, a senior economist at Dai-ichi Life Research Institute.
Japan’s 2.8 per cent unemployment rate is the lowest since 1994 but most of the hiring over the past decade or so has been for temporary, often part-time positions, known as non-regular.
A shift back towards permanent hiring could help sluggish consumer spending pick up.
Non-regular workers now make up more than a third of the workforce. Many work part time, and all on average receive less pay, few benefits, little training and no real job security.
It’s too early to declare a trend reversal, but the number of regular jobs grew by 260,000 in March from a year ago, while part-time, temporary and contract jobs rose by 170,000, the Internal Affairs Ministry reported on Friday.
Last year, 510,000 permanent jobs and 360,000 non-regular ones were added.
The ratio of non-regular workers in the workforce stood at 37.5 per cent last year, the highest on record dating to 2002, according to government data.
It should decline as more women become regular employees in sectors with severe labour shortages such as retail and elderly care, said Sakuyama.
But the impact on wages and consumer spending could be limited. Those sectors hiring more regular workers offer lower pay and suffer from lower productivity, meaning they have narrower margins to grant raises.
A return of inflation this year will limit real wages, too.
Regular workers get paid about 53 per cent more than non-regular ones on a comparable monthly basis, according to the labour ministry.
But they’ve seen slower pay increases because the unions representing them often favour job security over aggressive bargaining. Bloomberg
A worker at a nursing home in Tokyo. The ratio of non-regular workers in the workforce in Japan should decline as more women become regular employees in sectors with severe labour shortages such as retail and elderly care.