February 2023 2nd issue: What is the problem with non-regular employment in Japan and what should be changed?
Non-regular employment refers to working under a fixed-term employment contract. On the other hand, working for an unlimited period of time until retirement is called regular employment or lifetime employment. Non-regular employment includes part-time workers, part-time workers, dispatched workers, contract workers, etc.
In Japan, "lifetime employment" and "seniority-based system" have been the main forms of employment. In particular, it is said that the era of high economic growth in the latter half of the 20th century was created by employees who believed that they would work at a company for the rest of their lives in the context of "lifetime employment" and "seniority system."
However, from around 1990, around the time the bubble burst, a series of bankruptcies and staff reductions at large companies led to a decrease in regular employment and an increase in non-regular employment.
Temporary workers, who are non-regular employees, were temporarily praised as a "free way of working". However, in reality, it seems that there are more than a few people who have no choice but to work as non-regular workers because they cannot become regular workers.
Non-regular workers have the problem of lower wages than regular workers. It is said that Japanese wages did not rise for about 30 years after the collapse of the bubble economy. The expansion of non-regular employment is said to be one of the major reasons why Japanese wages have not risen for 30 years.
1. Should non-regular employment be eliminated or expanded?
Since the bubble burst, non-regular employment has expanded. Even if you get a job at a large company, you can no longer continue to work with peace of mind for the rest of your life. The idea spread that Japan should also promote the "mobilization of human resources" and expand non-regular employment to revitalize the job change market.
However, looking at the current situation of non-regular employment, it may not be said that the expansion of non-regular employment has necessarily had a positive effect on the Japanese economy, society, and the lives of Japanese people. There are those who strongly argue that the expansion of non-regular employment was a mistake.
Whether non-regular employment should be eliminated or expanded depends on social conditions and workers' circumstances, and there is no single fixed answer. All I can say is that the world is changing at an ever-faster pace, and that Japan cannot afford to ignore global trends and remain isolated. If so, it is necessary to take policies and measures that will revitalize the Japanese economy, raise the wages of Japanese people, and improve the lives of Japanese people, even in situations where non-regular employment is expanding.
2. From "employment security" to "vocational revitalization"
Even if you are a regular employee, you cannot be happy as a worker if you work as a "company slave" in a so-called black company. In addition, in an era of rapid change, the types of jobs with many job openings will change, and the skills required by society will also change rapidly. In an era like this, rather than stabilizing employment by increasing the number of regular employees, we should aim to revitalize occupations so that people can actively take on a variety of jobs, even if they are in non-regular employment.
Better yet, how about changing the name of the "Employment Security Office" to, for example, "Employment Revitalization Center"?
I think it is important for the government to make efforts to motivate people so that they can take on various jobs and improve their skills.
3. Measures for wage increases for non-regular workers
Non-regular workers have the problem of lower wages than regular workers. Why are the wages of non-regular workers low in Japan? The reasons for this are that they are in a vulnerable position where their employment contract may be terminated, that many non-regular workers are not members of labor unions and are not likely to be targets of wage negotiations, and that Japanese people are obedient in the first place. Japanese labor market is not active enough to allow non-regular workers to "step up" by freely finding higher paying jobs, or working as non-regular workers For example, non-regular workers do not have the know-how to negotiate wage increases in certain situations. There is also an opinion that temporary workers who take middle margins tend to keep the wages of dispatched workers low for their own profit. Not all temporary staffing agencies are like that, but it seems that there are malicious temporary staffing agencies that intentionally try to keep the wages of dispatched workers low.
The following measures are considered to be effective in raising the wages of non-regular workers.
(1) Legislation to prevent non-regular workers from being disadvantaged in contracts
(2) Promoting participation of non-regular workers in unions
(3) Call on non-regular workers to make claims for wage increases
(4)Vitalization of the labor market and provision of "step-up" information to non-regular workers
(5)Training on wage negotiation know-how when working as non-regular employees
In addition, policies to motivate temporary workers to actively raise the wages of dispatched workers, or policies to impose penalties on unscrupulous dispatched businesses that intentionally keep wages of dispatched workers low. etc. may also be required.
4. Dispatch report and information disclosure such as margin rate
Dispatching business operators that have obtained a worker dispatch business license are obliged to submit a "worker dispatch business report" every year (submission is required even if there is no dispatch record). In addition, in order for workers to be able to choose a more appropriate dispatching agency, dispatching agencies are obliged to disclose information on their efforts regarding margin rates and education and training.
However, I feel that there is a little problem with this "information disclosure such as margin rate". The method of disclosing information such as the margin rate varies depending on the company, so it is difficult to investigate. When I conducted the survey in 2022, it was difficult to find information, and there were quite a few businesses that did not properly disclose information. I don't think it's possible to say that the disclosure of information has made it easier for workers to choose the most appropriate temporary staffing agency.
"Information such as the margin rate" that must be disclosed is part of the content described in the dispatch report. In that case, I think it would be a good idea to create a system in which the dispatch report is submitted online, and the "information on the margin rate, etc." If so, information will be disclosed as long as the dispatch report is submitted, without having to spend time and effort, and I think that it will be easier for researchers to compare and consider dispatch companies because information will be disclosed in a unified format. In this regard, it might be a good idea to actually conduct a survey of dispatched workers to find out what kind of information should be disclosed to make it easier for them to select an appropriate dispatching company.
5. Is it okay to leave career advancement education and training up to dispatch companies?
Dispatch business operators need to establish a "career development support system" for dispatched workers, and then formulate a plan for "education and training that contributes to career advancement." This obliges dispatched business operators to formulate education and training plans for career advancement of dispatched workers.
Some temporary staffing agencies are actively working to advance the careers of dispatched workers, but on the other hand, it seems that there are also companies that have hardly implemented the education and training that should have been planned. The future of dispatched workers will be greatly affected by whether the dispatching business is actively working on career advancement or not. Is it okay to leave the career advancement education and training to the temporary staffing agency? I'm a little skeptical about this system of temporary staffing.
With regard to career advancement education and training for dispatched workers, it may be better for the government to create a specialized educational organization to raise the level of training, rather than leaving it up to dispatch companies. Why don't you make dispatch companies bear the cost so that dispatched workers can receive education and training at the educational organization? If so, I think it will be possible to eliminate unscrupulous dispatch companies that only make plans but do not actually provide education and training to their dispatched workers.
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