Japan Press Weekly

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2014 November 26 - December 2 [POLITICS]

Abe gov’t promotes corporate downsizing

In Japan, the number of contingent workers is increasing while that of regular workers is declining. Behind this trend is the fact that the Abe government is encouraging companies to reduce their regular workforce.

In the 2013 growth strategy, the Abe administration stated that it would change the labor policy from one helping to preserve jobs to one promoting labor turnover. The phrase “labor turnover” means cutting workforce.

Based on that policy, the Labor Ministry has slashed the amount of subsidies to companies making efforts to keep workers on the payroll, while boosting grants to businesses that dismiss employees.

The amount of the employment adjustment subsidies, which is aimed to prevent workers from being fired, was cut in half from 117.5 billion yen in FY 2013 to 54.5 billion yen in FY 2014. The government plans to further halve this budget in FY 2015.

Meanwhile, the amount of grants available to help enterprises to downsize their workforce skyrocketed by more than 50 times from some 600 million yen in FY 2013 to 30.1 billion yen in FY 2014. The state is to increase this amount to 36.3 billion yen in the next fiscal year.

The governing Liberal Democratic Party, which promises to relax labor regulations in its general election campaign platform, is trying to further expand contingent labor and unstable employment.