Tue, Jul 23, 2013 - Page 15 News List

Election winner Abe pledges ‘decent work’

AFP, TOKYO

Photographers and TV cameras yesterday focus on Japanese Prime Minister Shinzo Abe during a news conference at the Liberal Democratic Party’s headquarters in Tokyo, Japan.

Photo: EPA

Tokyo shares rose 0.47 percent yesterday as investors welcomed an election victory for Japanese Prime Minister Shinzo Abe’s ruling party.

The benchmark Nikkei 225 Stock Average added 68.13 points to 14,658.04, while the TOPIX, an index of all first-section shares, was up 0.38 percent, or 4.55 points, to 1,216.53.

Voters handed Abe a thumping victory in upper house elections on Sunday, which will likely usher in a period of stability for politically volatile Japan.

The widely expected win means both chambers will be under government control, unblocking the bottleneck that has hampered legislation for the past six short-term prime ministers and at a time when the Japanese labor market is ripe for change.

However, where one camp sees a need for greater job security in a country of nervous and spendthrift consumers, another says too much worker protection is the root of much of the malaise that has beset Japan for the past two decades.

“When I heard Mr Abe talking about ‘decent work,’ I thought it was a joke,” said Makoto Kawazoe, an official from the General Union of Young Workers in Tokyo.

“What he’s trying to do is exactly the opposite of decent work, something that will increase insecurity among workers,” Kawazoe said.

As Japan’s economy roared to life after World War II, its companies struck a bargain with their staff: You commit to working hard for us and we will give you a job until retirement.

Lifetime employment served Japan well; it produced wealth, powered growth and provided a large measure of order in a society that prizes stability and harmony.

A raft of protections grew up around the concept, guaranteeing the rights of workers.

However, economists say since Japan’s economy stopped its upward march at the end of the 1980s, firms that are no longer world beaters have been left bloated with unneeded staff.

“In a graying society where demand for goods is weak, Japan needs to shift its industry from manufacturing to services,” said Yoshimasa Maruyama, chief economist at major trading house Itochu.

However, under current sclerotic labor rules, it is hard to shift workers, he said.

Abe says the key is helping firms make the transition.

“We will provide money for job training that would prompt greater labor mobility from mature sectors into growing sectors,” Abe told journalists earlier this month.

Advocates of a labor-rules rejig say as well as benefiting companies, this will be a boon for workers.

They say that if a company knows it has some wiggle room once someone is in a job, they will be more likely to take on new employees on a permanent basis, reversing the trend of recent decades.

Temporary workers now account for about 35 percent of the entire national workforce.

As well as having little security, they also have less money. On average, a temporary worker earns ¥3.1 million (US$31,000) a year in salary and bonuses, less than two-thirds what someone on a permanent contract is paid, according to figures from Japan’s National Tax Agency.

With more money in their pockets, workers will have more to spend, giving Japan’s companies more customers. That would raise the tax take and help government finances.

“We will seek to realize decent work, that is, the creation of jobs that have humane working conditions and are rewarding,” Abe’s Cabinet declared last month.

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