Why and how did Japan finally change its ways? The politics of Japanese labour-market deregulation since the 1990s

Bibliographic Data

ID12239753
AuthorsHiroaki Richard Watanabe (0000-0002-8377-0195, University of Sheffield, corresponding author)
Year2012
Volume24
Issue1
Pages23-50
Publication date2012-02-06
Peer ReviewedYes
Open AccessNo
TypeARTICLE
VenueJapan Forum (JOURNAL)
Journal identifiersISSN: 0955-5803 • E-ISSN: 1469-932X
PublisherRoutledge (PUBLISHER • GB)
DOI10.1080/09555803.2011.637636
OpenAlexW2045244754
LanguageEN
Citations received8
References cited22

This article analyses the politics of Japanese labour-market deregulation since the 1990s with reference to the cases of the 1999 and 2003 amendments to the Temporary Work Agency Law. It demonstrates that factors such as the loss of political power by labour unions vis-à-vis employers and the resulting significant changes in labour policy-making structures enabled the LDP government to implement 'extensive' labour-market deregulation policies related to 'non-regular' employment. The decline of the left by the 1980s and the economic stagnation after the collapse of the bubble economy against a background of globalisation led to the establishment of the Deregulation Committee, which represented business interests and exerted strong policy influence due to the Cabinet's adoption of its policy proposals. In addition, labour unions lost political power as a result of factors such as their inability to maintain common policy stances towards labour-market deregulation and the reduced influence of 'tripartite' policy-making among labour, employer and public representatives in the advisory councils of the Ministry of Labour. This article contributes to the literature on Japanese political economy by showing an 'exceptional' case of extensive economic reform in Japan and its political reasons. Keywords: Labour-market deregulationglobalisationtemporary agency workpolicy-making structuresinstitutional changeRengō and Nikkeirenpartisan effects Notes 1. The discretionary work system (sairyō rōdōsei) is an exception to work-time regulation for full-time regular workers and is a work arrangement in which salaries are decided based on the time assumed necessary to accomplish a task or a project instead of actual hours worked. 2. According to the OECD Employment Outlook 2005, Japanese regulation on individual dismissals of regular workers is stricter than the OECD average and it has not changed a great deal since the late 1980s. In contrast, regulation on the use of temporary agency work and fixed-term contracts has been progressively eased (employers' use of part-time work was already extensive in Japan even before the 1990s). 3. Japan experienced industrial hollowing-out (sangyō kūdōka), which means the transfer of Japanese companies to overseas countries (especially countries in East Asia) to seek lower labour costs and a resulting reduction in the number of Japanese companies remaining in the domestic market. Companies established with Japanese capital in overseas countries often export their cheap products back to Japan. The investment by Japanese companies in East Asian countries has expanded due to the emergence of new markets since the end of the Cold War period. 4. METI (Ministry of Economy, Trade and Industry), which is in charge of the growth and stability of domestic industries and the promotion of international competitiveness of Japanese companies, also requested the implementation of deregulatory measures aimed at increasing labour-market flexibility. 5. The three categories are: 1) full-time regular workers under the lifetime employment system; 2) highly-skilled workers in fixed-term contracts; and 3) general non-regular workers. Nikkeiren aimed to reduce the number of full-time regular workers under the lifetime employment system so that Japanese companies could compete more efficiently by cutting personnel costs and enhancing functional flexibility. 6. While there was a difference between employers in the service sector and the export-oriented manufacturing industry in the extent of their demand for labour-market deregulation (those in the service sector were more pro-deregulation), Nikkeiren repeatedly mentioned globalisation in its annual reports and emphasised the increasing need for more flexible industrial relations, diversity in employment forms and containment of personnel costs by implementing labour-market deregulation. 7. Nikkeiren and Keidanren submitted policy requests to the government and, after the Deregulation Committee discussed these requests with the Ministry of Labour's involvement, some of them were adopted as Cabinet decisions (interview with a member of Nihon Keidanren, 15 August 2008). 8. Successive LDP administrations after the Koizumi administration were less enthusiastic about the implementation of labour-market deregulation and revived the tripartite policy-making in the advisory councils. 9. The Japanese government implemented reform measures to merge several ministries in 2001 for the purpose of achieving a smaller government and introducing more efficient policy-making. The number of advisory councils was also reduced at the same time. 10. In addition, the LDP's dominance of the government in Japan until 2009 necessitated that Rengō maintain not-so-hostile relations with LDP governments and made it difficult for Rengō to exercise veto power in the advisory councils (interview with a member of the DPJ, Hasegawa Yūko, Executive Director, Department of Working Conditions, Rengō, and Murakami Yōko, Section Chief, Employment and Labour Legislation Division, Department of Working Conditions, Rengō, 20 August 2008). 11. Although the Central Employment Security Council had an equal number of employers', labour and public representatives, there was no labour representative from agency workers (Weathers Citation2004, p. 433). 12. ILO Convention No. 181 recognised the legitimacy of private employment services including temporary agency work. 13. DPJ members in the Diet were often endorsed by Rengō when they ran for election and policy preferences of Rengō and DPJ members in the Diet were often similar (interview with Ōmi Naoto, Assistant General Secretary, Rengō, 18 August 2008; interview with a member of the DPJ, Hasegawa Yūko, Executive Director, Department of Working Conditions, Rengō, and Murakami Yōko, Section Chief, Employment and Labour Legislation Division, Department of Working Conditions, Rengō, 20 August 2008). 14. In the 1985 Temporary Work Agency Law, two renewals of a one-year contract were allowed for temporary agency work, thus a three-year temporary agency work contract was a de facto possibility (Miura Citation2002, p. 222). 15. Although the opposition's control of the House of Councillors was important to labour unions, all the opposition parties could do for the most part was amend government bills (interview with a member of the DPJ, Hasegawa Yūko, Executive Director, Department of Working Conditions, Rengō, and Murakami Yōko, Section Chief, Employment and Labour Legislation Division, Department of Working Conditions, Rengō, 20 August 2008). 16. As part of the ministerial reorganisation during the administrative reform of 2001, the ministries and advisory councils were streamlined. The Ministry of Labour and the Ministry of Health and Welfare merged to establish the Ministry of Health, Labour and Welfare, and the Central Employment Security Council was included in the newly established Labour Policy Council. 17. In fact, even though the LDP-Kōmeitō coalition possessed a two-thirds majority in the House of Representatives from 2005, it was rare for the coalition to attempt to pass bills unilaterally without consulting with the opposition parties. 18. For example, a proposal to privatise public employment offices (Kōkyō Shokugyō Anteijo, or 'Shokuan'), a destination of labour bureaucrats' amakudari (descent from heaven, i.e. re-employment of retired bureaucrats), was opposed by the Ministry of Labour (Kume Citation2005, p. 111)

Agency (philosophy · Cabinet (room · Deregulation · Economics · Flexicurity · Globalization · Government (linguistics · Labour economics · Market economy · Political economy · Political science · Politics · Sociology · Temporary work · Work (physics · Employment and Welfare Studies · Labor Movements and Unions · Law · Social Policy and Reform Studies

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