Japanese Labor Reform Debate Gets Underway

The debate on deregulation of working hours was first brought up by business leaders as the Japan Business Federation (Keidanren) believes that some employees work for long hours but do not perform well. Toray Industries Chairman Sadayuki Sakakibara, who will assume the next Keidanren chairman role, told a joint meeting with the Industrial Competitive Council and other parties on April 22 that reforms are necessary for Japanese companies to secure and promote their competitiveness in the global market.

Deputy Chief Cabinet Secretary Hiroshige Seko commented on the matter during a TV program recorded on May 28, saying that if labor deregulation does not progress, foreign companies would not open businesses in Japan.

While the labor ministry emphasizes that the reform plans target a very limited number of workers, labor unions suspect that the targets will expand as the labor law concerning dispatched workers has been deregulated since it came into force in 1986.

Japanese Trade Union Confederation (Rengo) President Nobuaki Koga slammed the new pay system, saying that it would allow companies not to pay for overtime work. In fiscal 2012, labor standards inspection offices ordered 1,277 companies to address cases of unpaid overtime, in which the estimated payment totaled roughly 10.4 billion yen. Labor unions are concerned that the new pay system will impose long working hours on employees. A senior Rengo official pointed out that changing a corporate culture that lacks moral standards should be prioritized before pushing for deregulation.

via Mainichi

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza