Japan Press Weekly

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2012 November 7 - 13 [LABOR]

Political support for corporate restructuring - III: Revision of laws satisfies business world

Since the late 1990s in response to deregulation demands from the Japanese business circles and U.S. capital, the government began revising laws related to the use of labor and on corporate activities.

The government’s adverse revision of employment laws, including the Worker Dispatch Law and the Labor Standards Law, enabled large corporations to reduce labor costs drastically.

The government, for example, between 1996 and 2003, gradually eased regulations on the use of temporary agency workers: in 1996 the number of job categories designated by the dispatch law for using agency workers increased from 16 to 26; in 1999 the use of agency workers was allowed in all industries in principle; and in 2003, the use of agency workers in manufacturing areas was liberalized and the legally permitted period on the use of agency workers was extended from 12 months to 36 months.

In order to support corporate restructuring, the government in 1997 and 2000 introduced new legal systems which allow corporations to downsize employees by splitting up their profitless units.

Furthermore, the government in 1999 established a tax system which reduces corporate taxes when corporations carry out job-cutting measures.

The system was scheduled to have been abolished in 2003. The government, however, postponed abolishing the system and expanded industries eligible for the system. The number of jobs slashed under the system amounts to more than 100,000 during 10 years since the system was created.

Representative of the Japan Research Institute of Labor Movement Kumagai Kanemichi said, “The government amended laws in order for big businesses to dismiss workers easily. They regard labor only as cost.”

The government’s adverse revision of employment laws and corporate law has resulted in destroying the job market, creating a large number of unemployed and contingent workers, lowering workers’ average income, and widening social inequality. An increase in the number of lower-income earners has decreased consumer spending. Promotion of pro-business policies has cooled domestic demand and weakened the Japanese economy.


Previous articles:

> Political support for corporate restructuring - I: End of life-time employment system [October 24, 2012]
> Political support for corporate restructuring - II: US demand for deregulation of labor laws [October 24, 2012]