Japan’s super-tight job market isn’t delivering on its egalitarian promises

People walk past an electronic board displaying stock prices outside a brokerage in a business district in Tokyo, Japan, January 4, 2017. Picture taken January 4, 2017. REUTERS/Kim Kyung- Hoon

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TOKYO, Sept 1 (Reuters) – When Riku Omori’s pay at his regular job was cut by a third, he found temporary work delivering fried chicken and Thai food on his bicycle through the streets of Kawasaki , south of Tokyo, as a way to supplement his reduced income.

The extra 100,000 yen ($722) for 26-year-old Omori is given a month’s assistance to support his wife and newborn son, which would have been difficult with the 160,000 yen he he brings home every month from his main job at a moving service company.

But it adds a level of financial uncertainty that makes life tough in Japan, a wealthy nation otherwise well regarded for its egalitarianism.

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“The main problem of being self-employed is family worries. Your salary will be useless if there is no work,” Omori said, adding that he would have preferred to work for one employer who guaranteed a job. minimum income.

Omori is one of a hard-to-follow group of people who are willing to do freelance work to make ends meet, often working jobs that fall outside the scope of employment laws that guarantee minimum wages and a minimum wage. social Security.

This job ranges from delivering meals and reception at budget hotels to teaching music, selling futons and maintaining toilets in a country where lifetime employment was once the norm.

The emergence of the freelance class poses a challenge to Prime Minister Fumio Kishida, who has pledged to redistribute wealth through wage hikes that have hitherto escaped Japan despite a chronic labor shortage.

Japan’s most recent unemployment rate of 2.6% in July was among the lowest of the 38 member countries of the Organization for Economic Co-operation and Development (OECD), slightly higher than rates recently reported by Switzerland and the Denmark.

About 38% of the 57.1 million workers employed in the world’s third-largest economy were temporary employees, according to government data, who do not enjoy the same benefits as those on open-ended contracts.

LOWER THE COSTS

As the economy slows, companies are cutting costs by filling vacancies with low-paid or on-demand workers, instead of better-paid permanent employees, analysts and freelancers say.

“There will be more and more people who cannot get by with their salary even if they are employed,” said Toshiaki Tsuchiya, 46, a founding member of an independent union.

More people will be doing side gigs that offer little of the security and stability that a regular job brings, added Tsuchiya, who earns about a fifth of her income delivering food during her overtime hours.

“They will have no choice but to work like workers.”

Rising low-paying jobs would depress overall domestic demand, said Shigeru Wakita, professor emeritus of labor law at Ryukoku University in Kyoto.

Wakita expects the number of people with serious work-related problems to increase due to the prevalence of gig work.

“In reality, workers should be protected, but they are not treated as such,” he said, adding that Japanese unions had failed to resolve the plight of non-regular workers. Read more

As part of its attempt to regulate the gig economy, the government has sought to estimate the number of people in self-employment.

According to a May 2020 government survey, which it also cited in its key annual policy framework published in June, 4.6 million people were in self-employment as their main or side job.

About 63% of them were dissatisfied with their income, almost double those who were “satisfied” or “extremely satisfied”, according to the survey.

EVOLVING NEEDS

The rise of gig work is not entirely bleak.

This type of work has become more common as demand for job flexibility increases, especially among older people and housewives in Japan looking to work part-time, analysts said.

The government’s promise to draw up a plan to increase the number of start-ups by 10 over the next five years could also lead to benefits – such as subsidies – for entrepreneurs who choose to work with freelancers, have they stated.

“More people are working differently than before,” said Toru Suehiro, senior economist at Daiwa Securities.

The government has said it will consider extending Social Security eligibility to the self-employed and odd jobs.

He also pledged in June to draft laws clarifying contract terms between companies that work with freelancers.

One of the benefits of self-employment was that the income earned with it was likely to increase with skill, Omori said.

“As a freelancer, the more I work, the more I get paid when I do my best,” he said.

($1 = 138.4300 yen)

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Reporting by Daniel Leussink and Kantaro Komiya; Editing by Sam Holmes

Our standards: The Thomson Reuters Trust Principles.

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