# Points of the Analysis of the Labour Economy 2013 (White Paper on the Labour Economy 2013)

~ Employment, Human Resource and Ways of Working in the Midst of Structural Change ~

## Background of the analysis

☐ Changes in the companies which are on the labour demand side and changes in the employees which are on the labour supply side are intertwined behind labour issues. Also, labour demand is derived from demand for products and services.

☐ The structural changes such as globalization, population decline, and aging population have progressed in the midst of economic stagnation after the burst of the economic bubble; the companies which are on the labour demand side are facing management challenges including difficulty in forecasting the prospects of growth fields, and necessity of securing and developing human resources.

☐ With this situation in mind, the analysis focuses on what actions could the companies take toward sustainable growth of the Japanese economy and the growth-led expansion of employment and income on the labour supply side.

### Chapter 1. Trends and features of the labour economy

The analysis mainly covers the trends of employment/unemployment, wages, working hours, prices/workers' household expenditures and labour-management relationship in 2012.

Movements toward

• The employment situation is showing movements of improvement recently, although it still remains severe.

recovery of

• Looking at the breakdown of general workers' total sum of cash earnings, we can see that the fluctuation of scheduled wages is generally small. In the labour-management negotiations in the spring of 2013, some companies agreed on bonus increase, as their business performance was improving.

employment

and income

• The consumption expenditure of workers' households increased in 2012, for the first time in two years. Consumer confidence has improved from January, 2013, as consumer expectations have become higher mainly in terms of the employment environment.

### Chapter 2. Change of Japanese economy and employment structure

From the standpoint of sustainable growth of the Japanese economy, we have summarized, by industry and occupation, the transition of employment structures, employment creation, etc. on a medium to long term basis. We have analyzed new growing fields as well as the roles and challenges of manufacturing industry.

• In line with the further expansion of the service economy, the employment structure also shows the trend toward the service economy.

• Since 2001, the gap between the entry rate and the exit rate has been closing. It is necessary for the whole government to make efforts toward economic growth and to create employment, by increasing the entry rate through creation of new businesses in strategic fields, etc.

- The manufacturing industry provides quality work opportunities, supports regional employment and creates employment for all industries through export, thus plays an important role in terms of employment. In the future, it will be important to create value added through such means as entry into new industrial fields, and to secure competitiveness, backed by systems to cultivate abilities and qualities of human resources as well as diversification of human resources.

• The tasks for all the industries are to improve productivity of the service industry, etc., to create and maintain high value-added industries, and to change the industrial structure through labour mobility without unemployment.

### Chapter 3. Changes in acquisition and development of human resources in the labour market

Toward strengthening competitiveness in the midst of changing economic and employment structures, effective use of human resources are the foundation of competitiveness. The analysis covers the human resources sought by companies as well as the actual conditions of recruitment of new school graduates and non-regular employment.

Challenges toward effective use of human resources

• In order to assist employment of young people, companies should make further efforts to more clearly define what kind of human resources they are seeking, and universities should endeavor to improve students' abilities and promote student internships. The government should promote strengthening of collaboration and information sharing among organizations of small and medium enterprises, Hello Works, universities, and other entities.

• While regular employment has not been decreasing, the non-regular employees increased due to human cost saving, etc. Most of the non-regular employees are fixed-term contract employees. The fixed-term employees account for 28% of all the employees, and it is expected that more employees will move from fixed-term employment to permanent employment. From the companies' viewpoint of improving productivity through securing of human resources and increasing their stability, and from the workers' viewpoint of developing careers of non-regular employees and securing more stable employment, we need to facilitate "diversified ways of working."

## Summary ~ Toward expansion of employment and income through growth ~

It is necessary for both companies and workers to adjust themselves to the structural changes and to strengthen competitiveness and human resources, in order for us to realize a "virtuous economic cycle" in which increase of employment and income are attained.

☐ It is important to encourage human resources, the most important resource in Japan, to fully exert their potential ability, leading to establishment of a "society where everyone participates in social activities."

☐ It is important to promote the "labour policy toward growth" through cooperation among labour, management and the government, including labour mobility without unemployment and diversified ways of working.