However, it is expected that skilled workers will leave the construction business in droves due to aging and other factors. The most important issues to address in order to maintain the quality and appropriate functionality of infrastructure will be the promotion of efforts to attract and keep young people to take over the future of the construction industry and the securing of human resources. From this perspective, an agreement between public and private entities to take on the task of securing future leaders with resolute determination by endeavoring to further reinforce measures to secure and cultivate leaders with a focus on improving job conditions and by improving productivity within the framework of the construction production system through public-private partnerships was reached at the tenth meeting of the Construction Industry Revitalization Council held in May 2015.

## (2) Making thorough improvements to working conditions

Declining wages (low earnings) is conceivably a factor behind the shrinkage in the construction industry workforce. If we look at the trend in the recurring profit margin of the construction industry, we can see that the profitability of construction industry was higher than the average of all industries combined in the first half of the 1990's. However, since the economic bubble burst, the declining trend has continued, and since 2000's has remained at a low level in the 1% range. Since FY2011, it has started to recover due to the reconstruction demand, but still remains below the profit rate of the manufacturing industry and of all the industries combined (Figure 3-2-5).

In regards to the wage of skilled workers, if we look at the trend in the total annual wage amount paid to male production workers in the construction industry, there is a large increase continuing into the first half of the 1990's, and the difference between their wage and that of male production workers in the manufacturing industry shrak significantly. However, since then the wage of the construction industry started to decrease, the difference has again widened (Figure 3-2-6).

The fact that an environment for social insurance and other welfare programs has not been developed and the fact that improvements in job conditions have otherwise lagged behind those of other

Source) Developed by the MLIT Ministry of Finance "Corporate Annual Report of Statistics"

(Notes) 1 Annual wages = set amount of cash salary × 12 + annual bonuses and other special salary

Set amount of cash salary = amount of cash salary paid for June (amount before deducting income tax, social insurance fees, etc.), and includes base salary, duty allowance, perfect attendance allowance, travel allowance, family allowance, overtime etc.

Annual bonuses and other special salary = any bonuses paid out between January and December of the year previous to survey year, special salary like year-end allowance, etc.

2 Production workers refers to workers engaged in the production of goods being carried out mainly at work sites (construction site, etc.)

3 Survey conducted on private establishments that employ over 10 permanent workers.

Source) Developed from Ministry of Health, Labour, and Welfare “Basic Survey on Wage Structure”

industries are key factors behind the loss of highly skilled workers and the difficulties young people have in finding and keeping work in the construction industry. It is essential that efforts be undertaken to thoroughly improve working conditions if we are to secure leaders in this industry. To this end, the MLIT is carrying out the following initiatives:

## (Promoting the appropriate payment of wages and enrolment in social insurance schemes)

In order to secure appropriate wage levels for on-site workers, a fourth round of increases in the unit price of labor for