A RENGO Perspective on the Japan Revitalization Strategy:
For Whose Sake Is “Japan’s Revitalization”?
July 17, 2014
Japanese Trade Union Confederation (JTUC-RENGO)

Introduction
On June 24, 2014, the Cabinet of the government of Japan approved the Japan Revitalization
Strategy (revised in 2014; hereinafter Revitalization Strategy 2014) and Basic Policies for the
Economic and Fiscal Management and Reform 2014 (hereinafter Basic Policies 2014). In thisperspective, we contrast the government’s policies with RENGO’s philosophy and clarify their issues
and problematic areas. Based on this perspective, we will endeavor with all our might to represent thevoice of workers in the Diet, on advisory boards, at the budget-drafting table, and at other venues torealize “a secure society based on work.”

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I．General Remarks
1. For whose sake is “Japan’s revitalization”?
At its core, the strategy for Japan’s revitalization should be a plan to turn around a hobbling
Japanese society. It must give a clear message from the viewpoint of citizens about the kinds ofreconstruction that should be carried out and their direction.
However, what is described as the core of Revitalization Strategy 2014 is the mobilization ofpeople, goods, and money to improve “earning power” and create “the world’s best environment forbusiness activities.” Social ideals are not mentioned.
Revitalization Strategy 2014 exclusively adopts the viewpoints of companies and investors. It is apolicy developed in conformity with the desires of a portion of industries and parties involved withthem. Symbolic of this philosophy is the statement in the document that to “create ‘the world’s best
environment for business activities,’ the government must specify relevant challenges such as . . .
regulatory reforms for improving the investment climate.” It further established the “Council for
Promotion of Foreign Direct Investment in Japan” as the control tower to “improve the investment
climate.” In other words, high stock prices support Abenomics, and what support high stock prices areforeign investors. Top priority is placed on messages to investors and companies pursuing
short-term profit, while citizens and workers are given short shrift. The document lacks awarenessthat Japan’s society faces the danger of becoming unsustainable as the ranks of Japan’s broad middle
class, which supported the country’s postwar society, grow thin and the working poor increases. Nordoes the document give a prescription for these issues.
2. Workers cannot be sacrificed for economic growth
Prime Minister Abe stated that he wanted the effects of Abenomics to ripple across the entire
country and restore economic growth. However, Abenomics envisions trickle-down economics inwhich the strong is made stronger to pull up the economy and spread wealth to the rest of society,making it difficult to reverse growing social inequality. We need to reflect on the lack of distribution of
the fruits of economic growth to the people during the 2000s, and overturn the economic model itself.
The Lehman shock has changed global currents. Investors and companies are reflecting on their
unprincipled use of money in pursuit of short-term maximization of profit and their belief in making
profit for the company while pushing risk and its effects to the people. Increasing decent employment
is being viewed as key to economic revitalization. This past May, the OECD Ministerial Council stated,“A key challenge is to achieve inclusive growth by providing social protection and empowerment topeople, which can strengthen human security.” There is concern over growing social inequality and anemphasis on the necessity of inclusive growth.
Revitalization Strategy 2014 directly opposes this thinking. It depicts a growth strategy throughmeans that sacrifice workers by degrading worker protection rules, such as the creation of a “newworking hour system” and studying a monetary settlement system for worker dismissals, for the sake2

of economic growth. An attitude that considers worker protection rules in the same vein as economic
regulations means the rules can be destroyed using political force for the advancement of economic
metabolism. This approach is abominable. What should be carried out is to focus on revamping
deteriorating employment as the centerpiece of Japan’s revitalization, halt the growth of anunequal society, and set in motion an economic virtuous cycle through a bottom-up approach.
3. A growth strategy decided without the participation of workers is a growth strategy riddledwith problems
Despite Revitalization Strategy 2014’s basic theme of rebuilding Japan’s economy and society,which is directly tied to the lives of her people, the strategy was developed by a handful ofgovernment supporters and then approved by the Cabinet. The strategists’ method of determining
worker protection rules as simply regulations backed by the interests of certain organizations anddefining issues and working out approaches to their resolutions unilaterally while representatives ofworkers are excluded from the planning process is problematic. Worker protection rules are theminimal rules that allow workers to lead lives with human dignity. It should not be reviewed in a
one-sided manner by the employers.
The original role of politics is to allow the diverse voices of citizens to be heard, deepen
understanding through debate, and guide the country in a better direction. We must return to thefundamentals of democracy; we should not have a ruling party that simply basks in its size.
RENGO will continue to demand participation in the review process of critical policies thatdeeply affect citizens’ lives. Above all, discussions related to employment and labor policies should
conform to the International Labour Organization (ILO)’s principle of tripartite constituents,
and be carried out at the Central Labour Standards Council.
4. Revitalization Strategy 2014 is a mere statement of government policies that slight theworkplace and cannot be said to constitute a strategy
Revitalization Strategy 2014 lists individual policies such as reforming the employment system,
promoting women’s social participation, strengthening the competitiveness of Japan as a business hub,and invigorating financial and capital markets. However, included are not a small number ofquestionable policies whose effects diverge from the actual state of affairs.
The strategy showcases as one of its features the goal of creating a society where women canparticipate more actively to support a depopulating society. However, it shelves issues that needaddressing for this goal to be met, such as shortening long working hours which many working
women worry about, casting aside the notion of gender role assignment, and eliminating genderdisparities in employment.
Also, the strategy calls for the corporate tax rate to be lowered. However, it does not explain at all
the extent to which domestic investment increased when the tax rate was reduced in the past.
Revitalization Strategy 2014 sees its first step as securing an average annual economic growth3

rate of a nominal 3 percent or a real 2 percent by fiscal 2022. However, without clarifying the
economic society it aims for, it cannot be said to be a strategy that envisions the ideal shape of society
ten years later. Nor does it put individual policies together into a coherent package.
Seeking to realize “a secure society based on work,” RENGO has assembled a policy package
to be realized by 2020, and has worked to put policies into practice. As the representative ofworkers, RENGO will continue to be involved as an agent in Japan’s revitalization.
RENGO sees major issues of Revitalization Strategy 2014 as follows.

4II. Item-by-Item Discussion
1. Relaxation of working hour regulations(1) Creation of working hour system that rewards workers for their performance instead of the lengthof time spent on work (so called “white collar exemption system”)
According to Revitalization Strategy 2014, “a new working hour system will be created to breakthe link between the length of time spent on work and wages . . . [for] workers who have specific job
scopes and advanced vocational skills and meet a certain annual income requirement (e.g., no less than
10 million yen).” This system seeks to remove the application of regulations mandatory for employers
under the Labor Standards Act. These regulations include working hour rules such as a maximum ofeight hours per day and 40 hours per week, provision of rest periods and holidays, and extra pay forworking overtime and on holidays.
If the proposed system is created and basic and minimal protection regarding working time isremoved, it is clear that this will precipitate the further lengthening of working hours forworkers. We cannot accept a system contrary to work-life balance and which invites mental illness
due to overwork and crushing work. This system threatens to harm workers’ health and safety and maylead to suicide and death from overwork.
The government should directly face the reality that more than 100 workers die from overwork
every year, and act with urgency in preparing policies that realize not “zero overtime pay” but “zerodeaths from overwork.”
RENGO believes that measures for preventing long working hours and policies for realizing
effective rest from work should be established. Such measures include the introduction of regulations
specifying intervals between working hours and a substantive cap on working hours.
(2) Construction of new framework for discretionary work system
The government seeks to establish a new framework for discretionary work for employees
working on a discretionary basis in a company’s core departments or R&D departments. Separate froma discretionary work system being already introduced that applies to workers employed in planningwork (including design, investigation, and analysis) and specialized work (such as R&D), theproposed system seeks to introduce a new discretionary work system that targets a wide range ofworkers in a company.
In a discretionary work system, workers with a broad discretion in performing their work carryout their work under an agreement with their employers that specify a certain number of working
hours without specifying the exact hours of work.
Therefore, if the discretionary work system does not apply only to workers who are recognized tobe really performing work on a discretionary basis, regulations on working hours will be nullified forall practical purposes under the name of the discretionary work system. This will result in long
working hours and overly burdensome work.
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RENGO believes that for building a new framework for discretionary work and reviewing theexisting discretionary work system, measures from the workers’ standpoint should be taken to
manage appropriate working hours and ensure workers’ health and welfare. The government
should not easily expand the definition of discretionary workers.
2. Introduction of “mechanisms for pecuniary remedies provided to workers through court
decisions” (monetary settlement system for dismissals)
To create a “transparent and objective labor dispute resolution system,” the government isseeking to introduce a “monetary settlement system for dismissals” with the reason that “majorindustrial countries have developed mechanisms for pecuniary remedies provided to workers throughcourt decisions in line with their respective employment systems.”
This system had been debated at the Labour Policy Council when studying the revision of theLabor Standards Act in 2003. It is a system in which when litigating the validity of dismissals incourt, a company can simply end employment of a worker by offering a monetary settlement,even if the worker wins a decision finding that his or her dismissal is invalid (unfair dismissal).
Thus the company can choose not to return the worker to the workplace.
Consequently, if such a system is introduced, it is clear that problems such as the following willarise: 1) the worker’s path back to the workplace is closed even if he or she wishes to return, damaging
his or her dignity; 2) if claims of financial settlement from employers are accepted, then the climate
where workers can be dismissed simply by paying money will spread; and 3) because at present it isalready possible for mediation or a labor dispute court to settle a dispute financially, if this system isadopted means of relief for workers will become constrained. Therefore, RENGO absolutely cannot
accept the introduction of this system.
Furthermore, even though the government uses the language of “a framework that can provide
monetary relief,” instead of having discussions on how the system can be reformed to provide relief toworkers, the government glosses over many problem points and risks. One cannot help but say thatsuch language deceives the people of Japan.
Worse still, in advance of debating the pros and cons of introducing this system, the government
states that it will analyze and summarize monetary amounts in mediation cases in labor dispute courts
and trials with the cooperation of the courts. This action raises issues including the following: 1)
doubts concerning its sufficient legal basis if the government is reviewing the records of labor disputecourts not open to the public, and 2) the high likelihood that analyses of disputes will overlook
questions at the heart of the matter if calculation of average figures are carried out without considering
the circumstances of each case. The standard for settlement amounts in past dismissal cases varied
considerably depending on the content of the case.
Because of the major problems found in a financial settlement system for dismissals and how its
debate is being advanced, RENGO resolutely opposes the adoption of this system. This systemseeks to relax employment rules in the name of diversifying means of relief for employees.
63. Reforms to develop a society where foreigners can fulfill their potential(1) Expansion of Technical Intern Training programs
With the purpose of producing a greater number of workers, the government is seeking to review
Technical Intern Training programs for foreigners by expanding job categories and lengthening thetraining period (from 3 years to 5 years at most), and expanding admission quota on trainees.
The Technical Intern Training programs were originally meant to serve as international
contributions to developing countries by developing human resources who are responsible for thecountries’ economic growth. However, judging from the actual conditions of their implementation,these programs have deviated from their purpose and are serving simply as a method of drawing inworkers (cheap labor). They are also involved in many cases of problems such as violations of laborlaws and human rights abuses of foreign technical trainees.
Taking this state of affairs into account, what should be done is to first correct the system sothat it returns to its original purpose, instead of expanding the foreign technical training programs
under the rationale of lack of labor in Japan. In doing so, to ensure the effectiveness of laws specifyingthat remuneration to foreign trainees should be the same or more than that of Japanese employees,
efforts that specify the minimal annual income for each job category should be carried out.
Also, although an intention to expand this Technical Intern Training programs to the nursing field
can be seen, communication ability in Japanese so as to prevent accidents due to deficiencies inmutual understanding is essential. There are also issues particular to nursing services such as growing
demand for skills to provide care for patients with dementia, which is becoming a social problem.
Because of these issues, expansion of foreign workers should not apply to the nursing field.
(2) Accepting housekeeping support workers in National Strategic Special Zones
The government is seeking to accept foreign housekeeping support workers in National StrategicSpecial Zones to promote women’s successful social participation.
However, it has been pointed that in the field of housekeeping support, it is difficult to bring out
into the open problems such as discrimination and abuse because housekeeping work takes place in aclosed environment that is the employer’s household. To improve working conditions of housekeeping
workers facing such problems, the ILO adopted the “Domestic Workers Convention (No. 189)” in
June 2011 (yet to be ratified in Japan).
Regardless of efforts being advanced internationally concerning human rights of housekeeping
workers, while conventions related to domestic workers are not ratified in Japan, acceptance of foreign
housekeeping support workers based on the notion of fixed gender roles that sees women as
shouldering housekeeping work should not be permitted, even in the limited scope of employing
them in national strategic special zones. The reasons take into account that there is no demand
among the Japanese people for foreign human resources who cannot be presumed to be able tocommunicate in Japanese.
74. Promotion of “comprehensive measures for the employment and training of young people who
create the future”
To advance employment policies for young people, the government is seeking to study acomprehensive set of measures and submit relevant bills to the next ordinary Diet session concerning
necessary legal preparations. Areas of review include: 1) enriching career education and vocational
training, 2) appropriate disclosure of recruiting and employment/retention of young people, 3)
strengthening of measures against companies suspected of treating young workers as “disposable,”and 4) bolstering job assistance for casual workers and NEET (not in education, employment or
training).
To bring about good opportunities for all young people to work, it is necessary to strengthen
measures against companies that use and then dispose of young people and to increase employment
support. A multifaceted policy is required, including increasing labor standard inspectors to takesuitable and strict measures against legal violations, complete disclosure by companies of theemployee turnover rate within the past three years, promoting labor education at school andproviding knowledge related to labor laws for workers and management, and reinforcing
regional support centers for young people.
Seeking to realize good employment opportunities for all young people, RENGO established“RENGO Employment Measures for Young People,” and actively presented its views at venues suchas the government’s “Employment Strategy Dialogue” and Labour Policy Council. The generalmeasures included in Revitalization Strategy 2014 are in rough accord with RENGO’s philosophy.
Studies of specific measures should be carried out with urgency in the Labour Policy Council with theparticipation of labor and management representatives.
5. Measures for a society where women shine(1) Questions concerning basic philosophy
From the standpoint of social justice and economic efficiency, it is critical that women actively
participate more than ever in a variety of fields. However, the basic philosophy of Revitalization
Strategy 2014 prioritizes economic growth through the participation of women, who are viewed only
through an economic perspective. Such a way of thinking may lead to the treatment of women simply
as a tool or instrument of economic growth.
What Revitalization Strategy 2014 lacks is an awareness of gender inequality such as
gender role assignment and a perspective that seeks to correct it. As shown by problematicstatements slighting women, without fostering an awareness of gender discrimination, a society where
women shine cannot be realized. Also, without directly facing the fact that the majority of women are
engaged in non-regular work and that nearly half of women workers earn an annual salary of 2 million
yen or less, measures that improve these conditions will lead to the bipolarization of women. To
realize a society in which all women can fulfill their potential, it is necessary to advance measures that8

correct gender discrimination.
The government seeks to attain “women’s share of leading positions at 30 percent in 2020.” To
achieve this, it should take positive actions to review existing laws such as the Gender Equality in
Employment Act. Legislation of new laws should be discussed after such efforts are sufficiently
carried out.
(2) Support for both work and life
To realize a “society in which women shine,” a major precondition is establishing an environmentthat takes care of children with safety and security. Many women are abandoning work because there
are insufficient childcare and nursing services. Building a social infrastructure providing these services
is an urgent matter. So that both men and women can work while balancing childcare and nursing care,
it is critical to review ideas about gender role assignment and ways of working while continuing toprovide social services for childcare and nursing care. This is not an issue that can be resolved simply
by promoting telecommuting, as Revitalization Strategy 2014 does.
At the same time, to allow women to work successfully, it is important that men actively
participate in housekeeping, childcare, and nursing care. The World Economic Forum releases theannual Global Gender Gap Index, which measures equality between men and women. Japan ranks
lowly in the 105th place (2013). Gender inequality in the country has a great effect economically andpolitically. Meanwhile, northern European countries, where men’s participation in domestic chores,
childcare, and nursing care is advancing, occupy the top spots. To eliminate inequality, it is necessary
to carry out efforts to transform men’s mentality.
Work styles of men premised on gender role assignment lead to long working hours. Nearly
20 percent of men in their 30s work more than 60 hours a week. According to an OECD survey, theamount of time men in Japan spend on domestic chores is only about an hour a day. To create a society
where both men and women can enjoy both work and life, it is necessary to improve the social
environment and modify work styles.
(3) Review of work style-neutral taxation and social security systems
Systems that hold back women’s employment are being reviewed. However, work style-neutral
taxation and social security systems are areas of concern not limited to just women.
Of the reasons for “work adjustment” by part-time workers (voluntarily restricting their wages tobelow a certain level), the most frequent is the worker’s income tax burden if he or she earns above acertain level; next is the burden of social insurance cost. There are also problems involving spousal
deduction. The problem of the “reversal of after-tax income” (after-tax income decreases within acertain range when both partners work despite the rise in gross household income due to an increase of
the tax burden) has already been eliminated by reforms to the taxation system. What is needed is the
spread of correct knowledge and fostering awareness concerning the current system. Going forward, awide range of taxation schemes (including the entire personal deduction system), such as
9integration of spousal deduction and dependent deduction and strengthening income
distribution functions by applying tax deduction or allowance instead of income deduction,
should be studied.
With regard to social security, an employed worker can be claimed as a dependent and thehousehold can receive tax deduction if the dependent earns an annual salary of less than 1.3 million
yen. This “1.3 million yen wall” suppresses spouses’ job-seeking. In the first place, the principle
should be that social security applies to all employed workers. In the meantime, with the aim of
expanding social security to part-time workers, the criterion for its application should be therequirement of working at least half of a regular employee’s work hours or an annual salary of 650,000
yen or above.
To realize a society where both men and women can continue working, it is critical to strengthen
comprehensive work promotion measures. Along with reviewing taxation and social security systems,
these policies include supporting occupational training and skills improvement with an eye towardassisting women, who must weigh new tax and social security burdens when choosing a work style, tosupport re-employment and conversion from non-regular employment to regular employment.
6. Social security reform(1) Measure for welfare recipients and the poor
The welfare system seeks to encourage independence in the poor and needy along withguaranteeing a healthy life at the culturally accepted minimal limit by providing needed protection
based on the extent of their poverty. Also, public livelihood assistance is a reference standard ofpolicies toward the poor. Because of this, revising the system should be carried out prudently.
Currently, households with a large number of members are experiencing a reduction in the standard of
livelihood assistance. To prevent a cycle of poverty, each type of assistance criterion should befurther reviewed.
Concerning measures for the poor and needy, comprehensive and individual support systems
tailored for the actual conditions of each region must be created nationally for the implementationof a support system that allows the poor to become independent. This system needs to be also
publicized.
(2) Ensure appropriate health/nursing care provision system and strengthening employees’ healthinsurance
The great issues facing the medical/nursing care system is the rapidly progressing low-childbirth
graying society and designing a system that can sustain such a society.
For health insurance, both employees’ health insurance and regional insurance must be
established and a universal healthcare system be maintained that provides sufficient care to theinsured. For employees’ health insurance and the national health insurance, reducing structural
financial risk such as differences in the ages and income levels of the insured and ensuring fairness
10and understanding of the system is critical. Therefore, to reform the system, basic consideration ofsocial solidarity held by the country, municipalities, insurers, employers, and the insured could bestudied.
To ensure the effectiveness of efforts by prefectures based on the medical/nursing omnibus act
to differentiate the functions of healthcare facilities and strengthen ties, to connect with nursing
care, and to secure human resources, studies and implementation systems should be reinforced andsteadily carried out, reflecting the intentions of the insured and community residents.
Concerning the long-term care insurance system, securing funds is necessary forstrengthening the functions of community comprehensive support centers to build comprehensive
community care systems and continue to improve the treatment of nursing care workers.
(3) Reforming management of public and quasi-public funds
Based on laws such as the Employees’ Pension Insurance Act, safe and reliable management ofpublic pension reserves should be firmly carried out from a long-term perspective for the exclusive
benefit of insured persons. The fund’s purpose is not for the contribution to Japan’s economy.
Revitalization Strategy 2014’s proposal of “reforming management of public and quasi-publicfunds” as government policy for the purpose of invigorating financial and capital markets is in and of
itself inappropriate. It risks sending the wrong message to the stock markets.
The purpose of the management of public pension funds is to secure returns needed for pension
finances as determined by financial evaluation. Reassessing the portfolio to pursue profit
maximization to the point to taking high risks does not result in benefits for the insured. The
percentage of reserves that make up pension revenue on a single year basis fluctuates greatly
depending on the fiscal year. Noteworthy is the fact that the performance of the Government Pension
Investment Fund (GPIF), which has pursued stable management since 1990, exceeds the performanceof the welfare pension fund.
In the case of public pension funds, the purpose of managing deposits is none other than“exclusively for the purpose of the insured persons.” For the GPIF, a governance system should beestablished that faithfully reflects the intentions of insurance premium contributors along withensuring necessary returns on pension funds through their safe and sure management based on the
results of the financial evaluation.
(4) Expand measures to deal with low childbirth and support environment for child-raising andhousekeeping
Support for children and child-raising should not be carried out simply from the standpoint of
measures for dealing with a rapidly declining population and a super-aging society. Instead, the goals
should be maximizing benefits in the interest of all children. For this, financial resources of morethan one trillion yen should be secured. This fund is needed to accelerate the new system forchildren and child-raising and carry out plans to reduce waiting lists for childcare.
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Expanding child-raising and housekeeping support environments from the limited
perspective of promoting women’s active social participation should not be carried out.
For the integrated operation of “after-school children clubs” and “after-school childrenclassrooms,” part of the “Comprehensive After-School Childcare Plan,” studies should be carefully
carried out so that the programs do not lead to the degradation of the standard for the
implementation of after-school activities.
7. An economic virtuous cycle and creating a sustainable economy(1) Establishing both economic revitalization and fiscal soundness
Fiscal soundness is the basis for sustainable economic growth. It is a critical challenge for not
pushing the financial burden to future generations. However, looking at the contents of the FY2013
supplementary budget and the 2014 draft budget, which include increased spending on public
works, one cannot say that the budgets were drafted with fiscal discipline in mind. The
government should first sincerely reflect on this problem, and then seek to steadily achieve the goal of
reducing the deficit in fiscal revenue and expenditure (primary balance) by half in FY2015 (comparedwith FY2010) relative to the GDP for the country and regions as a whole.
Basic Policies 2014 states that “the government will prioritize and streamline public expenditures
so that they will contribute to economic growth and development more effectively.” To carry this out,
the government should concentrate on measures for fields in which there is great latent demand andmany jobs can be created, such as healthcare and nursing, childcare, the environment and energy, andtourism. The measures should include budgeting, taxation, and review of economic regulations. The
government should also advance industrial policy and employment policy in an integrated manner.
Targets are not included in the Cabinet Office’s draft budget, and a specific path to achieving
positive primary balance in FY2020 has not yet been shown. The government must present a
medium-term fiscal plan that can gain trust from the markets by, for example, establishing aframework for medium-term budget planning and setting an amount of the issuance of new
government bonds and an upper limit to annual government expenditure. In addition, the government
should work to educate citizens of the necessity of fiscal soundness and gain their understanding.
(2) Tax reform (lowering of corporate tax)
Corporate tax reform has significance precisely for creating a virtuous economic cycle that leads
to an increase in domestic employment and wages while supporting firm domestic demand bystrengthening the competitiveness of the country and companies. To realize this cycle, the policy must
include as a set allocating the savings gained from the reduced tax rate to domestic investment bycompanies and an increase in employment and loan and ensuring that these measures are carried out.
In addition, the effects of tax reduction measures already implemented, such as the numerous
occasions of corporate tax reduction thus far, must be studied.
At the same time, to gain understanding and assent from the entire citizenry who are affected by
12the increase in consumption tax for supporting social security and easing the government’s financial
difficulties, the government should endeavor to explain the purposes and necessity of corporate tax
reform. Also, the centrality of tax collection within the corporate tax framework should be basic topersistent alternative sources of revenue, which are prerequisite for reducing the corporate tax rate.
When implementing specific corporate tax reform, the following should be carried out: 1)
revising taxation measures based on zero-base taxation, 2) introducing a dual corporate tax system for
all companies in general while taking small and medium-sized enterprises (SMEs) into consideration,and 3) maintaining a reduced rate tax (about half of the basic tax rate) for SMEs. Going forward, abroader study on medium to long-term tax reform is needed. The topics are not limited to justcorporate tax reform, but also income tax, consumption tax, and property tax from the perspective ofsafe and secure lives for the people.
(3) Regional revitalization
Revitalization Strategy 2014 can be evaluated for the direction of its measures in this area,
including its awareness of the issues as shown by its statement that “regional revitalization depends onwhether attractive employment opportunities including those for youths can be realized.” Also
included in its approach are advancing industries taking advantage of the unique resources of a region
and creating attractive places of employment in the region. Therefore, it is critical to promoteindustrial policy and employment policy in tandem. They include supporting training that takeadvantage of the features of the region for agricultural and forestry industries, for small andmedium-sized enterprises, and for local industries. Also included are the development of new
industries and employment of people in the community.
Councils on Regional Industrial Competitiveness established in different regions are seeking tocreate a virtuous cycle in the local economy by adding local financial institutions to the traditional
academic-industrial-government partnership to make effective use of local resources. However, stable
employment is indispensable to the development of the community, and representatives of local labor,
who are at the same time consumers, should be involved in the Councils. It is necessary for theacademic, industrial, government, financial, and labor sectors to work as one, and study and advanceself-reliant, sustainable regional revitalization plans.
(4) Measures for small and medium-sized enterprises
Revitalization Strategy 2014 can be appreciated for its emphasis on providing detailed support forsmall and medium-sized enterprises and on regional revitalization. To foster SMEs, it is necessary to
educate human resources who will be responsible for them. This, in turn, means that it is critical topass down skills and techniques, establish a social system that values artisans and tradesmen,
and therefore it is also critical to improve the treatment of workers and raising the basic level ofwages and working conditions.
Revitalization Strategy 2014 seeks to intensively devote policy resources for creating a support
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platform to realize regional revitalization measures in one package. However, diverse support
measures for current SMEs are not being utilized much. A top priority is improving the efficacy ofthese measures by publicizing them.
To develop industries rich in regional character throughout the country, it is necessary tostrengthen the government’s supervisory system so that subcontractors do not suffer frombearing the burden of the portion resulting from the increased consumption tax rate or beingbullied by bigger companies. It is necessary to create an environment where SMEs can engage infair transactions based on reasonable prices for products and services.
8. Civil Service Reform
Although Revitalization Strategy 2014 can be appreciated in terms of its push for theemployment and promotion of women, nurturing young workers, and advancing work-life balance,
the plan is problematic in not including proposals for the restoration of basic labor rights topublic employees. The government should respond sincerely to the repeated recommendations of the
ILO. It should also work out with urgency measures for establishing autonomouslabor-management relationships, which were not included in the “Legislation to Revise a Portionof the National Public Service Act,” enacted in the 186th ordinary session of the Diet.
Revitalization Strategy 2014 also calls for public employee reduction targets such as “a pace of
10 percent or more in reduction in five years after FY2015.” In recent years, the number of employees
and new hires has been reduced due to great government deficit. However, RENGO is gravely
concerned that setting a numerical target for reduction without inquiring into the actual conditions ofpublic workplaces and operations will hinder the sure implementation of high-quality public services
that support the reconstruction and rebirth of Japan after the 2011 Tohoku earthquake and tsunami. It
will also impede the safety and security of citizens, as well as detrimentally increase the number ofpart-time and non-regular precarious and low-paid employees. If the Abe administration seeks toslough off deflation and realize sound economic growth, what is required is securing necessary
workers.
9. Equal education opportunities
Revitalization Strategy 2014 states, “In order to realize a ‘world-leading employment
environment,’ we must link education and labor area reforms and enhance career and professional
education to create a system to turn out human resources who can win in competition with foreigncountries.”
However, the reality is that growing inequality in opportunities to receive education due to thecycle of poverty, as seen in the more than 1.6 million households who receive welfare benefits (as ofApril 2014), is a cause for concern. While it may be necessary to produce a great number of humanresources who can compete against overseas economies and win, we need to correct inequality andraise the level in creating the foundation that produces human resources supporting the growth of14

Japan. We must guarantee opportunities for all children to receive education, regardless of theirfamilies’ economic situation.
To reduce the burden on family budgets related to preschool education and high education, which
especially receive a low percentage of public expenditure, priority must be placed on enriching public
assistance on education fees through gradually easing of fees for early childhood education until it isfree and enhancing “grant-type” scholarships for higher education.
10. Employee invention system
As an example of “improving the employee invention system so as to provide both benefits tocompanies and incentives to inventors,” Revitalization Strategy 2014 raises the attribution of patentrights to the company (corporation) instead of employee inventor. However, if invention rights belong
to a corporation and companies are free to determine incentives for employees, the profits currently
being enjoyed by employees can become devalued. Studying a revision of this system despite the factthat there is no legislation seeking to change the principle of rights assignment in the first place isproblematic.
If Japan seeks to “advance technological innovation” and be “the world’s most excellent
intellectual property-based nation,” above all it must value the people creating innovations. Systemic
reforms lacking this perspective may lead instead to the result of brain drain, where outstanding
workers emigrate overseas. A systemic review should be carried out premised on securing incentives
for employees.

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