Japan's employment situation is improving thanks to the economy's recovery, which in part has been fueled by corporate efforts to deal with changing economic realities. To reduce personnel expenses, companies have been increasingly turning to the recruitment of cheaper "nonregular employees," such as part-time and temporary workers. Such employees now account for more than 30 percent of the workforce, and the trend looks likely to accelerate. As companies must try to survive in a world of cutthroat competition, perhaps such a change is inevitable. But it can cause unreasonable wage restraints, leading to an erosion of the foundations of the pension system. It seems Japan needs new employment rules, including a revision of the distribution of wages between regular and nonregular employees.
The diversification of employment is gaining momentum. According to a 2003 Ministry of Health, Labor and Welfare survey of employment patterns at companies around the country, nonregular employees make up 34.6 percent of the total workforce -- 7.1 percentage points up from the previous survey in 1999. In addition, 19.8 percent of companies forecast an increase in nonregular employees. Predictably, the survey showed that almost all nonregular employees who desire another employment pattern want to become regular employees.
Meanwhile, the number of regular employees is in considerable decline. According to an employment-structure survey conducted every five years by the Ministry of Public Management, Home Affairs, Posts and Telecommunications, as of October 2002 the number of regular employees (excluding directors) stood at 34.55 million -- a decrease of 4 million compared to the findings of the survey taken five years earlier. Corporate restructuring was responsible for this result. Companies have shifted from regular to nonregular workers in an effort to maintain their international competitiveness by slashing costs. As a result, the total per-capita wage of workers in fiscal 2003 posted a decline from the previous fiscal year for the third consecutive time.