Japan Press Weekly

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2008 October 29 - November 4 [LABOR]

Labor think tank proposes economic recovery by stimulating domestic demand

The Japan Research of Labor Movement (Rodo-soken) estimates that an increase in the full-time workforce and the establishment of strict employment rules will help increase household spending by 15 trillion yen and contribute to expanding domestic demand and help to initiate an economic recovery.

Rodo-soken announced the findings of its survey at a news conference on October 31.

Rodo-soken said that while large corporations are making record profits, an expansion of the contingent workforce and falling wages will lead to weaker domestic demand and production. This in turn will force workers to endure worsening standards of living.

Rodo-soken asserts that in order to break this vicious circle by creating jobs and increasing wages while boosting domestic demand and expanding domestic production, the government must take steps to force corporations to replace contingent workers with full-time workers and establish employment rules that will eradicate forced overtime work without pay.

The survey found that if part-time workers are promoted to full-time positions, their average annual income will be 4.86 million yen, up 2.4 million yen. If temporary workers aged between 25 and 29 are promoted to full-time positions, their average annual income will increase 1.1 million yen to 3.5 million yen. A total of 3.53 million contingent workers will benefit from an increase of 21.3 trillion yen in their annual income.

As a result, consumer spending will increase by 14.9 trillion yen. Domestic production, triggered by an increase in personal spending, will increase to 24.3 trillion yen and increase the country’s GDP by 2.5 percent.

At the news conference, Rodo-soken co-president Makino Tomio said, “The government economic policy is nothing but a form of pork-barrel spending. It is not intended to improve the current employment situation. The most effective measure is to provide full-time positions to workers with unstable employment. These findings of our survey will open the way for a healthy Japanese economy.”