Labor Markets and Labor Market Policies between Globalization and World Economic Crisis - Japan and

Deregulation of Employment Law after 1990 and Its Effects on Japanese Corporate Governance (S. 139-140)

Toshihiko Hozumi, Aichi University

1 Introduction

In this paper, I will investigate the Japanese labor market, focusing on the the area of non-regular employment1 after 1990 against the background of globalization and the deregulation of employment law. In the first part, I will investigate the process of the deregulation of the Japanese labor market after 1990 and the increase of non-regular employment in Japanese enterprises as a result of this deregulation. Following the boom period with high inflation from 1985 to 1990, the bubble economy crashed in 1990 and the Heisei depression began. Many enterprises, including large ones, stopped recruiting new college graduates as employees. Instead they took on more non-regular workers. The deregulation of the labor market in the 1990s was carried out against the background of the globalization of this period.

Manufacturing enterprises wished to cut the production costs of their companies under the pressure of international competition from other countries where wages were lower. Furthermore, the ideas of neo-liberalism influenced Japanese enterprises and politicians. The Japanese government under Prime Minister Koizumi (26 April 2001 - 26 September 2006) and the finance minister Tanigaki tried to loosen eonomic regulations such as employment laws. As a result of this deregulation, nonregular employment increased not only in certain sectors but also in the manufacturing industry as a whole.

In the second part, I will investigate the effect of the world financial crisis upon nonregular employment in Japan after 2008 and the increase in job losses amongst nonregular employees with inadequate social security safety nets. 2 The increase of non-regular employment in the manufacturing industry after the revision of the Worker Dispatching Law in 2004 was too rapid and the social security safety net was not sufficient for this atypical employment.

From September 2008 many non-regular employees lost their jobs, for example in the automobile industry and electronics industry and today the situation is dire for many (Ogura, 2006). In the third part I will investigate how Japanese corporate governance has changed as a result of the increasing numbers of non-regular employees. Today the new government of Japan under Prime Minister Hatoyama of the Democratic Party (since 16 September 2009) has already expressed an intention to revise the way in which workers are dispatched by agencies and to regulate this procedure. I would like to explain this new regulation and its impact. In the fourth part, I will compare the Japanese labor market with the German labor market, especially the deregulation of employment law and the active labor policies of Japan and Germany.