Rising unemployment is creating serious financial problems for the government, making it likely that jobless insurance premiums will be increased. In fact, Health, Labor and Welfare Minister Chikara Sakaguchi suggested the other day that the premium rate would be raised on an emergency basis, perhaps by the end of the year. He also indicated that unemployment benefits would be curtailed.
That is not all. The health ministry reportedly believes that another premium increase next April may be unavoidable if the jobless rate does not fall. The last time the rate was revised upward was April 2001. Clearly, the unemployment insurance system is on the brink of bankruptcy; it has been bleeding red ink since fiscal 1994. The ministry says the reserve may be depleted by the end of fiscal 2003.
Unemployment insurance has two principal aims: paying allowances to jobless people, and financing projects to stabilize employment. One-fourth of the funding for jobless benefits is supplied by the government, and the rest is split equally between employers and workers. Job stabilization projects are funded entirely by employers.