Japan’s Shrinking Workforce Spurs Shift to Full-Time Employees

Masahiko Tanabe’s life has changed since Japanese homeware retailer The Loft Co. made him a permanent employee and gave him a 10 percent raise. “This is kind of a luxury to me,” said the former temporary shop assistant. “I used to buy fish for dinner; now I buy meat.”

As aging employees retire, Japan’s labor market is shrinking, so companies are giving contract workers permanent status to retain staff. This reverses a trend that began in the early 1990s when a stagnating economy prompted businesses to hire more temporary employees and shed permanent jobs, many of which were considered lifetime positions.

“The era of companies just adding temporary workers is probably over,” said Kotaro Tsuru, a senior fellow at the Research Institute of Economy, Trade and Industry in Tokyo and a director of policy planning in the government’s Cabinet Office. “Full-timers are crucial for companies to increase productivity, accumulate knowledge and develop human resources to expand.”

The shift helped average monthly wages climb 18,700 yen, or 0.9 percent, to 311,400 yen ($2,850) in the first half of 2008 from the same period last year, providing some relief to households facing the fastest inflation in a decade. Better pay and job security may encourage consumers to spend more, supporting an economy that shrank an annualized 2.4 percent in the second quarter.

Easing the Pain

Permanent hiring is “easing the pain that rising food and gasoline prices are inflicting,” said Hiromichi Shirakawa, chief economist at Credit Suisse Group in Tokyo. Japan’s core inflation rate, which excludes fruit, fish and vegetables, accelerated to 1.9 percent in June from a year earlier, the highest since 1998.

The change in employment is occurring even as Japan slides toward its first recession since 2001-2002. That’s partly because demand for labor is close to the highest level in 16 years, according to a Bank of Japan index.

One reason is demographics: Japan is the first developed nation to register more annual deaths than births; and by 2030, the National Institute of Population and Social Security Research estimates its workforce will shrink 20 percent to 67 million. In 2050, 40 percent of Japan’s population will be older than 65, doubling from 2005, the Tokyo-based institute predicts.

All this is prompting companies to begin unwinding a practice that increased the proportion of part-time and temporary workers to one in three last year from one in five a decade earlier.

`No Other Way’

“There was no other way we could have that many shop staff gain the product knowledge needed to satisfy our customers,” said Nobuyuki Shinoda, managing director at The Loft. The Tokyo-based retailer of cosmetics, stationery and toys gave permanent contracts to all its 2,330 temporary workers, including Tanabe, in April.

The company has a total of 3,400 employees, and turnover has halved since the change, Shinoda said. Previously, 80 percent of The Loft’s temporary workers quit each year.

The number of Japan’s full-time employees rose at the fastest pace in 15 years in February, outstripping the increase in part-timers for the first time since 2006, Labor Ministry data show. Permanent workers averaged 2,430 yen an hour in the year ended March 2008, more than twice the 1,020 yen received by part-time and temporary staff, who typically aren’t eligible for bonuses or company health insurance and pensions.

Korean Barbecue

Tanabe, 45, said his pay raise allowed him to buy a 30,000 yen mobile phone and dine at Korean barbecue restaurants.

The trend “is definitely durable as the population is going to keep getting older,” said Glenn Maguire, chief Asia- Pacific economist at Societe Generale in Hong Kong. “This could potentially become more pronounced in 2009 and 2010.”

The country’s 7 million so-called baby boomers — people born from 1947 until abortion became legal in 1949 — began retiring last year, giving companies “room to transfer younger people from part-time to full-time,” said Robert Feldman, head of economic research at Morgan Stanley in Tokyo.

The government is pushing companies to hire permanent staff because of concerns that part-timers may be forced into poverty when they get sick or retire. The Labor Ministry implemented rules in April that urge businesses to give equal pay and benefits to temporary employees who perform the same work as full-timers. The regulations don’t force companies to comply.

New Rules

Shidax Corp., a Tokyo-based caterer and karaoke operator, made 500 of its 30,000 employees permanent when the new rules took effect.

“Even without the law change, we really needed to reduce the waste of spending on training new employees, as half of them quit within a year,” said Akira Imamura, who works in the company’s personnel department.

Some employers may find it difficult to pay workers more when their profits are being squeezed by record materials prices. Japan’s largest businesses expect earnings will fall for the first time in seven years for the year ending March 2009, the nation’s central bank said July 1.

Still, Shidax is considering adding more full-time staff. “We have to increase the knowledge and productivity of our employees, even if it raises our costs in the short term,” Imamura said. “This is just the first step.”

http://www.bloomberg.com/apps/news?pid=20601101&sid=a4JYSXJgkh0Y&refer=japan

Helping hand for immigrants

Hope seen in plan to promote Japanese-language education, visas

Under the plan, the rights of immigrants, defined by the U.N. as people who live outside their home country more than 12 months, would be bolstered and efforts made to make life more convenient for them here.

Those already in Japan would receive the same benefits as those who hope to live in Japan.

Under the plan, a law banning racism would be enacted. The government would ensure immigrants receive the same public welfare services as Japanese do, encourage universities and vocational schools to accept more foreign students and strengthen Japanese-language education.

The conditions for granting foreigners permanent resident and long-term resident status would also be relaxed.

The plan still must be accepted by the ruling coalition and approved by the Cabinet.

If this happens, part of the plan that does not require legislative changes, including loosening conditions for permanent resident status, could take effect within a year, as Nakagawa proposed to the government.

Policies requiring new laws or revisions, such as an antiracism law, will have to clear the Diet. Sakanaka hopes the needed legislation will be enacted in three years.

Keiko Tanaka, director of the nonprofit organization Hamamatsu Foreign Children Education Support Association, praised the LDP members for the plan.

“Children are able to communicate in Japanese but have not reached the stage where they study subjects such as history and science in Japanese. That’s largely because they spend time in language classes, while other kids are pursuing those subjects,” Tanaka said.

Tanaka, whose NPO sends Japanese teachers to schools in Hamamatsu, hinted that schools may as well have poor-performing children repeat a grade, even though this is a rarity.

In addition to giving foreign children better educational opportunities, the plan would potentially give foreign workers more protection by making it easier to get permanent resident or long-term resident status, replacing the less-secure working visa.

Foreigners with working visas who are unemployed at the time they have to renew their visa are in theory illegal residents.

Louis Carlet, deputy general secretary of the National Union of General Workers Tokyo Nambu, said he wishes the plan had specifically done away with the current lump-sum pension payout that allows foreigners to recoup a fraction of the money they’ve paid into the system if they leave.

People have to pay pension premiums for 25 years to qualify for benefits when they turn 65. Foreigners who pay the premiums but leave Japan after working less than 25 years get a lump-sum amount, which increases proportionately up to only 36 months.

“The system basically means (Japan is) trying to send foreigners away in three years,” Carlet said.

http://search.japantimes.co.jp/cgi-bin/nn20080816f1.html

Japanese Are Loath To Rebuild Workforce Through Immigration

Politicians Avoid Issue They See as Toxic

When threatened by soaring oil prices in the 1970s, Japan’s response was swift, smart and successful.

It transformed itself into the most efficient user of energy in the developed world, thanks to government leadership, engineering skill and a public that embraced conservation.

Now Japan faces a much more fundamental threat to its future — demographic decline that experts say will delete 70 percent of its workforce by 2050.

Yet the all-hands-on-deck response that quelled the oil shock is conspicuously missing from Japan’s policies for a disappearing population.

“Unfortunately, the people do not share a sense of crisis,” said Masakazu Toyoda, a vice minister at the Ministry of Economy, Trade and Industry. “Yes, we deserve some kind of criticism.”

Inside the government, there is growing agreement that Japan can head off disastrous population decline by significantly increasing immigration.

Japan has the world’s highest proportion of people older than 65 and the world’s smallest proportion of children younger than 15. Without immigration in substantial numbers, it will soon run perilously low on people of working age.

Yet among highly developed countries, Japan has always ranked near the bottom in the percentage of foreign-born residents. In the United States, about 12 percent are foreign-born; in Japan, just 1.6 percent. Most immigrants here are from Asia or South America. The largest number come from Korea (about 600,000 people), followed by China and Brazil. The Brazilians are mostly of mixed Japanese descent.

Yet there is little or no political will here to persuade or prepare the public to accept a sizable influx of foreigners.

Based on a round of interviews with Prime Minister Yasuo Fukuda and several other senior government officials and politicians, the issue is too politically toxic for extensive public discussion.

“We need to work out policy in order to actively accept increasing numbers of immigrants,” Fukuda said, adding that his advisers are researching and discussing the issue.

But as soon he explained the need for immigrants, Fukuda, whose approval ratings are an anemic 24 percent, said he had to remain cautious on the issue.

“There are people who say that if we accept more immigrants, crime will increase,” Fukuda said. “Any sudden increase in immigrants causing social chaos [and] social unrest is a result that we must avoid by all means.”

In his speeches and public appearances, Fukuda rarely mentions immigration. In that respect, he is like most politicians in Japan, which has little historical experience of substantial immigration.

“We really need to let the people know that the economy simply cannot be managed without the help of foreigners,” said Seiji Maehara, a member of parliament and a vice president in the opposition Democratic Party of Japan.

But Maehara said no leading politician here has the courage to say as much to voters. The silence is enforced, in part, by political ambition.

The Democratic Party, which last year won control of the upper house of parliament, has a rare opportunity to take control of the government away from the Liberal Democratic Party, which has more or less run Japan since the 1950s.

The ruling party, with the unpopular Fukuda as its leader, is more vulnerable to defeat than it has been in decades, according to many analysts. An election is possible this year but will probably be held in the fall of 2009.

Until then, as politicians from both parties jockey for advantage, Maehara said it is virtually certain that the “urgent matter” of immigration will get no public hearing whatsoever.

There is another way for Japan to slow population decline and maintain its workforce: persuade more Japanese women to marry, have children and remain on the job.

Japan is failing badly in this area. The percentage of women who choose to stay single has doubled in the past two decades. When they do marry and have children, they drop out of the workforce at far higher rates than in other wealthy countries.

These worrying numbers have been bouncing around inside government ministries for several years. But the policy response — in a government dominated by men in their 50s, 60s and 70s — has often been tentative and sometimes insulting to women.

A health minister last year described women of childbearing age as “birth-giving machines” and instructed them to do “their best per head” to produce babies.

In recent months, however, the government’s tone has changed substantially, as powerful politicians and business leaders have begun to call for enlightened government intervention that would ease the cost and complications of raising children.

“We need to organize our society so that women and families will be able to raise children while working,” Fukuda said in the interview.

To that end, the government is working on a bill to require companies to offer shorter hours to parents with young children and to stop requiring them to work overtime.

Still, Fukuda’s government is not proposing a major new increase in spending on national child care, in part because it does not have the money.

Japan struggles to pay the pension and health-care costs of the world’s oldest population. It also has a debt burden that amounts to 180 percent of its gross domestic product, which is the highest ever recorded by a developed country.

Government spending on child care here amounts to a quarter of what is spent in France and Sweden, where comprehensive family policies have increased the birthrate and kept women at work.

“I think we still lack adequate efforts on that front,” Fukuda said.

http://www.washingtonpost.com/wp-dyn/content/article/2008/05/29/AR2008052903576.html

Arbitrary rulings equal bad PR

In principle, people of moral fiber and legal solvency qualify after 10 years’ consecutive stay – half that if you are deemed to have “contributed to Japan.” For those with Japanese spouses or descendants (“Nikkei” Brazilians, for example), three to five consecutive years are traditionally sufficient.

That’s pretty long. The world’s most famous PR, the U.S. “green card,” only requires two years with an American spouse, three years’ continuous residency without.

Still, record numbers of non-Japanese are applying. The population of immigrants with PR has increased about 15 percent annually since 2002. That means as of 2007, “newcomer” PRs probably outnumber the “Zainichi” Special PRs (the Japan-born “foreigners” of Korean, Chinese, etc. descent) for the first time in history.

At these growth rates, by 2010 Japan will have a million PRs of any nationality – close to half the registered non-Japanese population will be permitted to stay forever.

But I wonder if Japan’s mandarins now feel PRs have reached “carrying capacity” and have started throwing up more hurdles.

Wise up, Immigration, and help Japan face its future. We need more people to stay on and pay into our aging society and groaning pension system.

Remember, non-Japanese do have a choice: They can either help bail the water from our listing ship, or bail out altogether.

http://search.japantimes.co.jp/cgi-bin/fl20080527zg.html

SAITU Strikes Back at Simul International

This week marks the first week of industrial action at language school Simul International, the first in its history. Tony and his fellow members have shown tremendous courage with surgical strikes nearly every day on the demand to be enrolled in Shakai Hoken health and pension.

Foreign workers are becoming increasingly aware of the importance of enrollment in Shakai Hoken health and pension schemes. In addition to a legal obligation for both employer and employee, it is an important protection in the event of injury or illness. Employees in Shakai Hoken also tend to be treated more like real, permanent employees, meaning it provides a modicum of job security on top of income and health security.

Osaka Labor Bureau to report NOVA, ex-boss Sahashi to public prosecutors

The Osaka Labor Bureau has decided to send documents to public prosecutors accusing collapsed English school NOVA and its former president, Nozomu Sahashi, of violating the Labor Standards Law by failing to pay workers’ wages.

The bureau has obtained information on NOVA’s financial status from a preservation administrator for the firm, and is continuing an investigation into the company.

Bureau officials have already questioned teachers over the company’s actions. They questioned Sahashi over the allegations against him on Oct. 29. Sahashi reportedly admitted that salary payments remained outstanding.

“We tried to somehow raise the funds, but we couldn’t gather the money together,” Sahashi was quoted as saying. It is believed that the labor bureau investigated the circumstances surrounding the unpaid wages, and concluded that it was able to question his criminal liability.

NOVA’s financial situation has plummeted since June this year, when the Ministry of Economy, Trade and Industry handed the firm a partial business suspension order. The company has not made salary payments that were supposed to be delivered to foreign teachers and Japanese employees in September and October. The amount of unpaid wages is over 2 billion yen.

The General Union to which teachers and other NOVA workers belong earlier requested that a case against NOVA and Sahashi be formed, saying that the continued delayed payment of wages violated the Labor Standards Law.

http://mdn.mainichi.jp/national/news/20071106p2a00m0na020000c.html

Foreigners march for worker rights

Workers from all parts of the globe battled wind and rain Sunday to give speeches, performances and then trudge through the streets of Shibuya, Tokyo, calling for job security and equality for all.

“This march is about raising people’s awareness about the job situation in Japan, especially for foreigners,” said an American woman dressed as the pink rabbit mascot for Nova, the nation’s biggest chain of English-language schools. “It keeps getting worse and worse, with job contracts and other common problems.

“We want contracts that are more beneficial for employees, not just for companies,” she said, asking to keep her name confidential.

About 300 mainly foreign supporters attended the “March In March,” which was organized by the National Union of General Workers Nambu Foreign Workers Caucus, Kanagawa City Union, Zentoitsu Workers’ Union and Tokyo Occupational Safety and Wealth Center.

“Three main areas are involved in our work,” said Peruvian Augusto Tamanaha, from Kanagawa City Union. “The first is dismissal. It’s too easy for foreigners to get fired for no or poor reasons. Second is salary issues. And third relates to accidents.

“For example, in an accident in the workplace, why do Japanese have one kind of treatment and migrant workers have another?” he asked. “We are fighting to (make employers) obey the law — the Labor (Standard) Law — as migrant people.”

“The most important thing is job security,” said Briton Bob Tench, general secretary of the National Union of General Workers [Tokyo Nambu] Nambu Foreign Workers Caucus. “The vast majority of language teachers are on fixed contracts, which in no way gives job security, because when the year ends there’s the threat that your contract may not be renewed.”

Social insurance and pensions are also equally serious issues, he said. “A lot of foreign workers are not enrolled in ‘shakai hosho’ (social security), which is against the law. It puts people at a great risk of hardship if they suffer from an illness or an accident.”

http://search.japantimes.co.jp/cgi-bin/nn20070313a4.html

Japan Mulls Importing Foreign Workers

The prospect of a shrinking, rapidly aging population is spurring a debate about whether Japan is so insular that it once barred foreigners from its shores for two centuries should open up to more foreign workers.

Japan’s 2 million registered foreigners, 1.57 percent of the population, are at a record high but minuscule compared with the United States’ 12 percent.

For the government to increase those numbers would be groundbreaking in a nation conditioned to see itself as racially homogeneous and culturally unique, and to equate “foreign” with crime and social disorder.

“I think we are entering an age of revolutionary change,” said Hidenori Sakanaka, director of the Japan Immigration Policy Institute and a vocal proponent of accepting more outsiders. “Our views on how the nation should be and our views on foreigners need to change in order to maintain our society.”

Schooling is compulsory in Japan until age 16, but only for citizens. So foreign kids can skip school with impunity. Arrangements such as special Japanese classes for newcomers are ad hoc and understaffed. Many of the foreigners [are illegally denied] pensions or the same health benefits as Japanese workers because they’re hired through special [and for the most part, illegal] job brokers.

The population is 127 million and is forecast to plunge to about 100 million by 2050, when more than a third of Japanese will be 65 or older and drawing health and pension benefits. Less than half of Japanese, meanwhile, will be of working age of 15-64.

Fearing disastrous drops in consumption, production and tax revenues, Japan’s bureaucrats are scrambling to boost the birthrate and get more women and elderly into the work force. But many Japanese are realizing that foreigners must be part of the equation.

Few support throwing the doors wide open. Instead, they want educated workers, engineers, educators and health professionals, preferably arriving with Japanese-language skills.

Corporate leaders are prime movers. “We can create high-value and unique services and products by combining the diversity of foreigners and the teamwork of the Japanese,” said Hiroshi Tachibana, senior managing director of Japan’s top business federation, Keidanren.

But government officials are so touchy about the subject that they deny the country has an immigration policy at all, and insist on speaking of “foreign workers” rather than “immigrants” who might one day demand citizenship.

Immigration in Japan does not have a happy history. The first wave in modern times came a century or more ago from conquered lands in Korea and China, sometimes in chains as slaves. Those still here the largest group being Koreans and their descendants still suffer discrimination and isolation.

Even today, the policy seems to lack coherent patterns. In 2005, for instance, about 5,000 engineers entered Japan, along with 100,000 “entertainers” _ even after that vaguely defined status was tightened because it was being used as a cover for the sex trade and human trafficking.

“Everybody, I think, is agreed on one thing: We want to attract the `good’ foreigners, and keep out the `bad’ ones,” said Hisashi Toshioka, of the Justice Ministry’s Immigration Bureau.

http://www.cbsnews.com/stories/2007/01/20/ap/world/mainD8MP5VG00.shtml

Gov’t looks to open up pension plan to part-time workers

The ruling coalition and government are discussing the possibility of allowing part-timers who work for an employer for more than a certain period to join the pension system, sources said.

Currently, companies are obliged to pay a half of pension premiums for their part-time employees who work more than 30 hours a week [sic].

Earlier, officials of the Ministry of Health, Labour and Welfare tried to make some 3 million people eligible for the pension system by cutting the required hours of work to more than 20 hours a week. But those in the distribution industry, which employ many part-timers, were so vehemently opposed to the plan that the ministry dropped the idea.

But now Prime Minister Shinzo Abe reportedly wants to allow more people to join the pension plan, prompting government and ruling coalition officials to discuss the idea of allowing part-timers who work for a certain period, probably more than one year, to join the system.

Under the idea, part-timers who work more than 20 hours a week for less than 12 months will probably be excluded from the pension system, sources said.

Currently, companies are required to pay half of pension premiums for full-time employees who work more than two months for a company.

http://mdn.mainichi-msn.co.jp/national/news/20061114p2a00m0na006000c.html

Temp staff violations to lead to suspension

A major Osaka-based subcontractor is facing a business suspension order after it continued to dispatch temporary staff in violation of the Workers’ Dispatch Law, sources said.

They said the suspension order, to be served as early as this week, will cover all 84 offices of Collaborate Co., and will likely see the manufacturing subcontractor’s business activities halted for a two-week period.

The Ministry of Health, Labor and Welfare decided to go ahead with the measure after Collaborate ignored repeated requests to stop dispatching temp staff under the guise of subcontracted workers.

In recent years, a growing number of manufacturers has been found accepting workers on a subcontracted basis as a way to skirt employment-related responsibilities, particularly in regard to safety and supervision.

Furthermore, if labor is brought in through temporary staffing agencies, manufacturers are legally obliged to offer the workers full-time working contracts after a certain period of employment.

Under the Workers’ Dispatch Law, subcontractors are prohibited from supplying manpower to firms with which they have agreed to provide services or materials to meet other contracts.

http://www.asahi.com/english/Herald-asahi/TKY200610020098.html