Plight of irregular workers

A labor ministry survey has found that people with irregular jobs now account for 40 percent of the nation’s workforce. The continuing increase of such workers, who are typically paid less than full-time regular company employees and face unstable employment prospects, threatens to hamper sustainable growth of the nation’s economy by undermining consumer demand. It could also result in a large percentage of the population lacking proper social security protection. The government and businesses must make serious efforts to improve the pay and other conditions of irregular workers.

One of the factors behind the increase in the number of irregular workers is the rise in part-time workers and elderly people on post-retirement re-employment contracts. According to the Health, Labor and Welfare Ministry’s survey on diversification of employment forms, 19.62 million out of the nation’s 52.4 million people on payroll as of October 2014 were irregular workers. Nearly 69 percent of them were part-time workers. While some 68 percent of regular full-time workers were males, about 64 percent of irregular workers were women. People 65 or older accounted for 11.9 percent of the irregular workers, up from 9.1 percent five years earlier.

The same survey also found that companies that reduced their full-time employees since 2011 — 27.2 percent of the total — outnumbered those that hired more regular workers since that year — 20.6 percent. This suggests that an increasing number of firms are replacing regular workers with irregular staff, including people on term contracts and temporary dispatch workers.

Businesses in general have been turning more and more to irregular workers as easy-to-hire and easy-to-fire manpower that they can use to fit their needs. Explaining why they hire irregular workers, 38. 6 percent of businesses said they needed to reduce manpower expenses, while 32.9 percent said they have to have a more flexible workforce to meet changing workload demands. A sizable chunk, or 30.7 percent, of the respondents also cited the need to quickly secure ready and capable hands to do the job — which leaves one wondering why they do not hire such talented people as full-time employees.

About 38 percent of the irregular workers polled said they chose such forms of employment because they can pick the working hours to their own convenience. But roughly 30 percent of the workers said they hope to secure full-time employment and about 18 percent said they took irregular jobs because they could not find full-time employment.

In the past, irregular jobs were mainly a means to supplement one’s income. These days, such work has become a primary source of revenue for many people, as revealed by the labor ministry’s survey, which reported that nearly 48 percent of all respondents and 80 percent of male respondents fell into this category. These findings indicate that if irregular workers’ wages remain at low levels, they will likely be trapped in poverty, which in turn will act as a drain on the economy and the government’s coffers.

One solution would be close the wage gap between full-time employees and irregular workers. The government, labor organizations and businesses must make serious efforts toward a system where people will be paid the same level of wage for work of the same value, irrespective of the workers’ employment status. The ministry survey shows that irregular workers are typically dissatisfied with their wages, and lack of training and education, fringe benefits and employment stability. Most irregular workers lack social insurance and other benefits compared to full-time workers. According to the survey, only 67.7 percent of irregular workers were covered by unemployment insurance compared with 92.5 percent of full-time workers, 54.7 percent versus 99.3 percent in public health insurance, 52 percent versus 99.1 percent in the public pension scheme for corporate workers, 9.6 percent versus 80.6 percent in retirement allowances and 31 percent versus 86.1 percent in bonuses.

Such gaps not only cause financial hardship now, but also raise the prospect that many low-paid irregular workers won’t have sufficient savings or social security protection when they retire, thus likely forcing them to live on welfare.

The government has set up a task force, headed by labor minister Yasuhisa Shiozaki, to help turn irregular workers into regular full-time employees and improve their working conditions. The government should seriously consider policy tools, including tax measures, to encourage companies to accelerate this change if they do not take sufficient actions on their own to reduce their irregular workforce. Its calls should not end up mere slogans.

  • solodoctor

    This piece alludes to but does not quite articulate the main reason why the percentage of these temporary, part time workers has gone up in recent years: it is more profitable for companies to engage in these employment practices. Even with a declining population workers don’t have enough leverage to demand better conditions of employment.

    Kudos to the JT for noting that the government needs to do more than come up with slogans about changing the situation. Clearly voluntary programs will not effect much change. As noted tax policy can and should be used to get companies to hire more permanent, full-time employees….at least those who are not 65+ and looking for long time career opportunities. It is past time for the government to take care of its citizens in this regard. An active and aggressive use of tax relief for those corporations which hire substantially more full-time permanent workers and raise salaries substantially (like 5%) should be implemented. And quickly!

  • Liars N. Fools

    In the era of globalization and the neoliberal response in Japan and in America, workers are crucified on the cross of “labor flexibility” and sadly are consigned to be the working poor. This is not likely to change for the better any time soon.

  • Ron NJ

    Giving teeth to the labor laws that are already on the books would be a good place to start if giving security to employees and ensuring that workers are classified properly is the actual end goal. As it stands I find it hard to believe that the government as a whole seriously cares that much about the workers – big business is priority #1, and if that means that the average worker’s conditions go down the toilet or we have to bring in more SE/E Asians on human slavery-level “worker trainee programs” to give business outs on taxes, pension and health insurance enrollment, time off, etc. so that they can further pad the bottom line, then so be it.

  • Bruce Chatwin

    Having one social insurance regime (health care, pension, and unemployment insurance) for ALL workers regardless of their employment status would remove one of the main incentives driving employers use of irregular workers: reducing payroll costs. The OECD calls for this very measure in its April 2015 OECD Economic Survey Japan report.

    Yasuhisa Shiozaki appears to never have had a job outside of government, which does not bode well for the outcome of this task force.
    I fear that for Japan’s legions of irregular workers, the future holds more of the same shoddy treatment by the mandarins running the country.

    • zer0_0zor0

      Mandarins, indeed.