FUJIYOSHIDA, Yamanashi Pref. -- Hiroshi Okuda, chairman of the Japan Federation of Employers' Associations (Nikkeiren), said creating a safety net for the unemployed should be a priority for Prime Minister Junichiro Koizumi, who is promoting structural reforms.

"I think voters showed their support for Koizumi (in last Sunday's Upper House election) because they are preparing to accept the pain coming from the prime minister's reforms," he said. "The government should build a safety net that can ease the pain."

Okuda said he hopes the government will adopt a 1 trillion yen emergency employment scheme that Nikkeiren proposed Thursday. The plan includes a 700 billion yen fund to create jobs that meet local governments' needs.

Although Nikkeiren, which mainly deals with employer-worker issues, will merge with the Japan Federation of Economic Organizations (Keidanren) in May, employment will continue to remain an important issue for business leaders, he said.

In a Thursday morning session, many business leaders who attended a Nikkeiren summer seminar insisted that Japanese firms consider other types of employment contracts to cope with future staff shortages.

Toshiba Corp. Chairman Taizo Nishimuro said the first task for employers is to change the traditional seniority-based salary system into a merit-based structure.

"Gaps in salary and corporate welfare benefits between full-time workers and women and elderly people (who hold part-time positions) are too wide," he said, calling for an improvement.

Oji Paper Co. Chairman Masahiko Okuni said that although employing women is more expensive in light of long-term paid maternity leave, hiring women remains worthwhile.

He also said Japan must look to overseas nationals as intellectual human resources.

"We should start accepting a small number of immigrants now," he said. "If a large number of foreigners enter Japan at one time, I'm afraid that it would affect Japanese culture."