[ Nippon Keidanren ] [ Policy ]

Japan Business Federation's
Emergency Employment Measures Program

October 23, 2002

Japan Business Federation (Nippon Keidanren)

Concerns are growing about further deterioration of the employment situation due to a prolonged recession and the ongoing disposal of bad loans. The establishment of a safety net is thus becoming an urgent issue. To deal with the situation, the Japan Business Federation (chairman: Hiroshi Okuda) has compiled the following employment program from the viewpoint of urgently dealing with the employment situation, securing and creating jobs and enhancing employability. The program is a revised version of the emergency employment measures program proposed by the Japan Federation of Employers' Associations (NIKKEIREN) in August last year.

I. Implementation of emergency job creation measures in view of the deteriorating employment situation. (from fiscal 2002 through 2004)
(Total expenditure ¥1 trillion, for a three-year period: general account budget)

There are concerns that if the disposal of bad loans and other structural reform program make progress, the number of jobless workers will substantially increase before the job-creation programs, to be explained below (II. Maintaining and Creation of Jobs), are implemented. Accordingly, the following temporary emergency job creation measures need to be implemented for about three years (1. and 2.) in addition to the existing employment measures.

1. Increase in Special Emergency Regional Employment Creation Subsidy (¥700 billion / three years: general account budget)
(¥350 billion net increase in revenue source)

The Emergency Employment Creation Special Subsidy System, implemented for three years from 1999 through 2001 with ¥200 billion appropriated from general account budget, was aimed at providing jobs for six months at longest. It achieved success by creating about 300,000 jobs, with the government, corporate employers and labor union advancing ideas respectively. Under the program, jobs which can be commissioned to the private were left to the private sector. In fiscal 2001, the Emergency Regional Employment Creation Special Subsidy was newly created (¥350 billion was appropriated from the fiscal 2001 budget) to extend support to job creation programs based on regional situations and achieved success in 2001 and 2002 as well.
We aim at reinforcing the system in order to create 1 million jobs by appropriating ¥700 billion, up ¥350 billion, over a period of three years (from 2002 through 2004) and continually taking effective regional job creation measures.
Regional situations and characters of projects should be taken into account regarding requirements of the grants (the rate of personnel expenses more than 80%, employment periods less than six months, etc.) so that employment will be expanded through better management.

2. State-related measures (about ¥300 billion/three years: general account budget)

  1. increase in the number of placement officials for better matching, etc.
    (about 36,000 persons placed through short-term, six-month employment programs, appropriation of about ¥43 billion from general account budget)
    Given that there are considerable job openings despite the continued severe employment situation, the number of placement officials at each employment security offices will be increased by an average of about 10, so that employers' needs will be accurately grasped and matching functions at employment security office will be enhanced.

  2. Creation of Education and Training Fund (¥250 billion/three years: general account budget)
    On the basis of employment data obtained by placement officials, employment security offices will rearrange vocational training curriculums in comply with the needs of job offering companies and implement vocational training which would directly lead to employment. The offices will extend support to job seekers who are not eligible for job seeker benefits or vocational training benefits, if they have strong motivations for vocational training.

II. Maintaining and Creation of Employment

The government has launched a proposal for creating 5.3 million jobs in service-related sectors. The Japan Business Federation proposes that efforts should be made to create jobs mainly in the five service-related sectors of housing; information and telecommunications; preservation of environment; medical and welfare; and temporary work and outsourcing. With the list of projects already completed, it will be necessary to energetically push for job creation led by the private sector, driven by the diversification of employment patterns and an early and positive implementation of regulatory reform.

1. Expansion of employment in service sectors (5 sectors)

  1. housing-related sector
  2. information and telecommunications sector
  3. environment-related sector
  4. health sector including medical and welfare services (nursing, child care, etc.)
  5. temporary work / outsourcing service sector
  6. utilization of structural reform special zones

2. Promotion of diversification of employment patterns (maintaining and creation of jobs based on ideas advanced by corporate employers and labor unions)

Promote the diversification of employment patterns in view of cost reductions by companies and the diversification of working people's job needs.

  1. work-sharing as emergency means
    Financial support has been extended to companies which secured employment through the introduction of work-sharing of the emergency response type (temporary reductions in working hours accompanied by wage cuts). This support scheme should be widely known.

  2. work-sharing for diversification of employment patterns
    This is a part of measures aimed at promoting the diversification of employment patterns. Employers and labor unions of individual companies need to further promote this system through such measures as shorter working hours; and the optimization of management of working hours control by encouraging employees to take annual paid holidays and reducing overtime work.

3. Maintaining and creation of jobs (smoother transfer of workforce, etc.) through regulatory reform of adjustment of demand and supply of workforce

  1. abolition of regulation on temporary work agencies and job placement system
  2. extension of fixed term labor contract periods from the current one year to five years
  3. relaxation of requirements of the discretionary work system

4. Promotion of telework and SOHO (small office & home office) work; promotion of employment at non-profit organizations

Some 170,00 persons are doing home-based work using information and telecommunications equipment, while engaging in child-care and nursing. Efforts should be made to increase the number of home-based workers living in remote areas by providing vocational training and leasing information and communications equipment. Start-up financial assistance should be extended to those who launched SOHO business. Subsidies should be offered for business operators who newly employed jobless persons. Employment of jobless persons through NPO should be also promoted.

5. trial employment, internship and temporary-to-permanent employment

  1. trial employment of young, disabled and senior persons
  2. promotion of internship program
  3. promotion of temporary-to-permanent employment under the worker dispatching system (abolition of regulations)

III. Enhancement of Employability (ability to be employed within and outside companies)

1. Rearrangement of curriculums for vocational training

Based on the idea explained in the "vocational education and training fund" (I.2 (2)), curriculums for vocational training should be rearranged, through coordination among parties concerned, to reflect employers' needs so that vocational training programs now under way would directly lead to employment. At the same time, vocational training curriculums should be compiled on the basis of data on employers' needs obtained in surveys conducted with the fund.

2. Support to recurrent education in universities, graduate schools and other higher educational institutions

3. Support to the enlightenment of young people's vocational perceptions

IV. Reform of Employment Insurance System

The employment insurance system should focus on jobless persons who absolutely need benefits. Employment insurance benefits should be rationalized from the viewpoint of encouraging unemployed persons to land new jobs at an early date. The way the government makes contributions to employment insurance should be reviewed. The government should infuse general revenue into employment insurance for a certain period in case the number of the jobless drastically increases under the impact of the disposal of bad loans and the acceleration of structural reform.
In reviewing the employment insurance system, directions of reform of the social and labor-related insurance systems as a whole should be taken into consideration.

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