The government has placed a high priority on narrowing the gap in pay and benefits between regular and contract employees as this will raise productivity and consumer spending, said Katsunobu Kato, minister for labor market reform.
Companies can afford to narrow the pay gap without cutting salaries for regular workers, because they have enough profits and reserves to increase labor's share of profits, Kato said.
The government will tackle Japan's notoriously long working hours by setting limits on overtime that could be submitted to the Diet sometime next year, he said.