[talk] Implementing structural reform while generating demand and coping with unemployment issues

Haruo Shimada: Professor of Keio University

Professor, Keio University, Economics Department and a Special Advisor to the Cabinet. Born in 1943, he received his MA in economics from Keio University, and his PhD in industrial Relations from University of Wisconsin.

Katsutoshi Suzuki: Currently Chairperson Japan Council of Metalworkers Unions

Currently, Chairperson - Japan Council of Metalworkers Unions. Born in 1942 he entered Toshiba in 1957, became the General Secretary of the Toshiba labor union in 1982. President of the Japanese Electrical Electronics & Information Union since 1996.

As a general rule, the implementation of structural reform will bring about a consequent rise in the unemployment rate, especially if basic policies include budget cutting coupled with write-offs of bad-debts. Mr. Shimada, who was assigned last summer as a special advisor to the Cabinet office to deal with job issues, has drawn up a constructive plan for creating jobs for 5.3 million people. By appointing Mr. Shimada as a special advisor, the government shows that they have begun to acknowledge to some extent the importance of stimulating demand.

On the other hand, Mr. Suzuki, who is one of the ablest disputants in the labor community, claims that since so much time would be required to generate 5.3 million jobs, structural reform must occur simultaneously with employment safety-net policies in order to reduce the threat of severe and immediate unemployment. The government’s unemployment policy has failed to produce an effective result to this point, Mr. Suzuki states, because there is little horizontal communication between administrative entities. Sources of information about outplacement, job training and job placement are not integrated, thus creating a mismatch between job offerers and seekers.
Mr. Suzuki doubts that Japan will be able to sustain the low unemployment rate it has enjoyed in the postwar era because the economy has matured and the high growth rates are a thing of the past. While acknowledging this reality, Mr. Suzuki pointed out that the real problem Japan faces is how to create a society in which people can make a living without any anxiety.

Regarding Mr. Suzuki's points, Mr. Shimada agreed with him without reserve. Mr. Shimada said that Japan should reflect on European societies where people still enjoy their lives even though the unemployment rate is as high, or higher, than in Japan. Rather than concentrating on short-term work-sharing, job policies should be implemented considering social structures. In Europe, the retired and women part-timers are engaged in work for nursing-care, while men are involved with housework and child-care. Such a division of labor is routine in European communities. However, the social security system for workers, including part-timers, has to be fully established beforehand.
Mr. Suzuki agreed with Mr. Shimada. in Japan, non-regular workers like part-timers and temps now comprise 27% of the total workforce. The principle of equal job opportunities also has to be taken into consideration. Under such circumstances, a social security system, which covers all the workers concerned, is definitely needed.

In addition to this, more constructive opinions were exchanged between the two on such issues as:
- the solution of functional mismatch by pooling personnel resources across the industrial communities,
- increasing unemployment insurance contribution premiums from both labor and management,
- preventing corporations from relying on the Government's job policies.