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Wednesday, Aug. 12, 2009
Party platforms offer no quick fix to job woes
Fourth in a series
With the unemployment rate hitting 5.4 percent in June, experts doubt the labor policies pledged by either the ruling bloc or the Democratic Party of Japan in their platforms for the Aug. 30 election will stave off layoffs anytime soon.
The Lower House election comes as calls grow, particularly from the growing ranks of axed temporary workers, for radical change in government labor policy.
"I want the government to change the worker dispatch law from a law that disposes of employees to one that protects them," said Hiroyuki Sato, a former temp worker at truck maker Hino Motors Ltd. The government should reinstate the ban on dispatching temp workers to the manufacturing industry, he said.
To help stabilize the employment situation for temp workers, who tend to be the first let go when the economy turns sour, the Democratic Party of Japan promises in its campaign platform to revive the ban against sending temp workers to manufacturers.
The DPJ, the Social Democratic Party and Kokumin Shinto (People's New Party) submitted a bill to revise the worker dispatch law in June, but it was scrapped when Prime Minister Taro Aso, the Liberal Democratic Party president, dissolved the Lower House July 21.
Sato supports this ban because he was a disposable worker whose contract was terminated after 3 1/2 years.
He started working at a Hino Motors factory in June 2005, then became a seasonal worker because companies are required to directly hire temp workers after three years. But due to the global financial crisis he was dismissed last year.
"I was told to leave a dorm on Jan. 1. I was furious that the company forced me to over work as much as they could and then discarded me," he said.
His employment status changed from a contractual to a temporary basis and then to seasonal. He never got the chance to become a regular employee.
Hoping to provide a safety net to nonregular workers like Sato, the DPJ is also promising to extend unemployment insurance to both regular and temp workers currently not covered due to their short-term contracts, prohibit contracts shorter than two months, and carry out a survey on poverty — something that has not been done since 1965.
According to an estimate by the Health, Labor and Welfare Ministry, nonregular workers who have been axed since last October or will be by next month will number 229,170.
As manufacturers downsize their production due to the global recession, many nonregular factory workers have lost their job and accommodations at the same time because manufacturers often provide housing near their factories.
As soon as they're laid off, they become homeless, said Mitsuo Nakamura, who worked as a day laborer in Tokyo's Sanya district for 25 years. "The number of homeless in Tokyo doubled since last autumn.
"In Shinjuku, homeless people who turn out for free food jumped from 300 to 600," he said. "Of course those former temp workers don't have (unemployment) insurance, and don't have a place to live."
According to senior economist Taro Saito of Nippon Life Insurance Research Institute, the DPJ's plan to offer unemployment insurance to such temp workers is a step in the right direction.
"It is a problem that temp workers are not entitled to unemployment insurance, which was originally designed for regular employees," he said. "Currently, the gap between the employment conditions of regular and nonregular workers is huge."
Saito voiced hope that the next administration acts to close this gap.
But he also said banning the dispatch of temps to manufacturers will not be a good policy for nonregular workers.
"Companies are less likely to hire regular workers instead of temp workers because it will be too costly. I know the DPJ's labor policy is for preventing companies from laying off temp workers. It may stop layoffs but also employment," he said.
Contrary to the DPJ's goal, this could encourage manufacturers to look for cheap labor overseas, he added.
Saito also noted that the DPJ's insurance-for-all policy, if it covers all workers, will be a disincentive for manufacturers to hire temps because companies would have to pay jobless insurance premiums.
Meanwhile, the long-ruling LDP has pledged to combat unemployment by generating more jobs instead of introducing tougher regulations on the temp dispatch law and expanding the scope of unemployment insurance.
The LDP's platform states that it will provide financial support to companies that suffer losses but retain redundant workers, and offer similar incentives to companies in rural areas with little employment opportunities if they start new businesses by hiring laid-off workers.
The LDP also hopes to increase employment in the medical, welfare and child care industries.
Yasuhide Yajima, senior economist at NLI Research institute, calls the LDP's labor policy unrealistic.
"Japan has been implementing economic growth strategies, but the employment situation hasn't improved. If the government cannot create more employment now, how can it do so in the future (via the same strategy)?"
Makoto Yuasa, a social activist and an organizer of the Hibiya Park tent village, said at an antipoverty campaign meeting last month that economic growth is no longer a cure for poverty.
"If poverty spreads while the economy grows, we have to question what the economic growth is for," he said.
But even if the DPJ ousts the LDP from power, economic think tanks estimate the unemployment rate will keep soaring toward year's end, Yajima said.
"Companies may see higher profits by cutting costs and not investing in plants and equipment, but their sales are dropping sharply," he said, offering no prediction on when the job situation might improve.
In this series, we take a close look at possible changes under a DPJ-led government and compare them with current policies under LDP rule.