Seek Work-Life Balance by Enacting a Basic Law

Yoshio HIGUCHI (Professor, Keio University)

A basic law should be enacted to promote work-life balance (WLB). A number of labor related bills are being submitted in the current session of the diet, but as work patterns keep on diversifying, community-based WLB should be pursued. This should be made a nation-wide trend, for a basic law to support WLB to be envisioned.

Large number of bills related to labor submitted for diet deliberation

A significant number of bills related to labor are being submitted in the current session of the diet, and some have even called it the "labor diet." Bills to improve treatment of part-time workers, review minimum wages to seek consistency with welfare benefits, promote employment of aged part-time jobbers, and clarify rules to conclude labor contracts are being prepared for submission by the government and the ruling party.

In the labor standard law there have been reports that new provisions related to a minimum rate of premium for overtime work is to be submitted, but a white collar exemption to exclude employees who work autonomously and discretionally from work hours regulation apparently is not going to be included. These issues have been brought up as a result of the diversification of types of jobs and work patterns.

The recent trend of diversification of work patterns in Japan has brought forth new types of highly developed and professionalized jobs within the framework of ordinary full-time workers, which has spurred adoption of individualized employment management. A labor force survey conducted by the Ministry of Internal Affairs and Communications shows that during the years from 1998 - when the deterioration of employment conditions began - until last year, regular full-time employees excluding executive officers decreased 4.5 million (12%). Meanwhile, non-regular employees, i.e., part-time and temporary workers and those dispatched by agencies on temporary basis, increased 4.9 million (42%), pushing up the ratio of nonregular employment from 24% to 33%.

The increase of service economy is certainly playing a part as a backdrop of this trend, but the major reason is the increase of nonregular employment in each industry sector. The trend has resulted in the expansion of income disparities, especially among younger generations, and immobilization of hierarchy is being observed, which has inevitably led to the tendency of late marriage and less children. Even among regular workers, highly developed and professionalized jobs have developed, making them impractical to deal with under traditional labor laws intended to be applied to employment management of large numbers of workers as a mass. The government, until recently, has tried to cope with these situations as they develop by enacting specific laws, and the host of bills presented to the diet this time is an effort to reinforce this policy.

Flexible and varied types of work becoming important

One of the main reasons behind the decrease of regular workers and the increase of nonregular workers is the intention of businesses to avoid making personnel expenses a fixed cost in the prolonged stagnation. In addition, businesses want to put a restraint on personnel expenses in the wake of escalating global competition. On the other hand, there are workers who prefer flexible ways of working. In a society of decreasing population with sharp decline of birth rate and quick aging, an environment is necessary where each individual, regardless of sex and age, can fully realize his or her will and capabilities to contribute to society, and for that purpose an option to work in flexible and varied manners needs to be made available.

Are such measures as balancing the treatment of part-time workers with regular workers or transfer of part-timers to regular employees sufficient to solve this problem? As a result of nonregular workers taking over tasks that used to be handled by regular workers, the volume of work as well as the responsibilities borne by regular employees has increased. This has caused an increase in working hours - over sixty hours per week - especially in large corporations, and the ratio of male employees working such long hours increased from 12% in 1994 to 18% in 2004.

According to the new future population projections (middle series) announced at the end of last year, fifty years from now those aged 14 and under will decrease by 60%, and those 65 and over will increase by 40%. At the same time, the population between the ages of 15 and 64 - the working-age population - will decrease by 45% to 38 million, while the total population will decrease to 90 million people. One of the most alarming issues here is the population dependency ratio. At present, 3.9 working-age people are supporting one senior resident, but in 2055, 1.26 working-age people must support one elderly person. In this type of society, it is essential to increase the employment rate and utilize the abilities of people in terms of both quality and quantity. In the traditional relationship between a corporation and its employee, there was a relation of - in a somewhat exaggerated expression - "security and fetters." The company would guarantee the life of an employee and his family, and in return, expect, as a matter of course, for the employee to work long hours and accept frequent transfers. Conversely, those workers who cannot tolerate such a system have been excluded from such life security and have had to bear auxiliary tasks and, being nonregular workers, have had little margin to advance their careers.

On the part of workers in general, the old system was traditionally accepted as such because a large portion of nonregular workers were housewives who would need only supplementary earnings for their households, despite the wage gap being significantly larger than in other developed countries. This has recently come to be recognized as a problem as young people, who are expected to become the heads of households, have began to become integrated into this category of nonregular workers.

Companies are now being pressed to review whether the old system is necessary for conducting their business. The revised Equal Employment Opportunity Law between Men and Women to become effective this April focuses exactly on the issue to be reassessed by the companies, which shares the same undertone with the notion of work-life balance (WLB).

WLB is intended for individuals to review the way to work in order for them to enjoy fulfilling private lives, while at the same time it asks companies to reassess the ways of doing business so as to increase hourly productivity and improve business performance. The creation of an environment where various and flexible styles of work become possible would promote effective utilization of human resources in an aging society with fewer children, while also making it possible for men and women to cooperate in balancing job and child rearing. This by itself could be an effective measure to reverse the birthrate decline.

A number of companies in Japan have begun to challenge the WLB. A mid-size data input and processing company located in Hyogo prefecture adopted an innovative system that took three years to implement. It first raised the pay scale of part-timers to the same levels per hour with regular workers. Then for each employee - including managers - wage per hour was set depending on the ability of the person and the level of difficulty of the assignment. The actual salary was then fixed by multiplying it with the hours worked. This has made it possible to introduce a system whereby each employee can decide and declare the hours and times to be on the job for the following month.

As a result, the company was able to hire those skilled workers trained at a large corporation nearby but who had to quit because of time constraints, which consequently contributed in increasing profit of the company. Employees can also go home during the day and come back later. This is a scheme adoptable by small companies located in rural areas, taking advantage of workplace and home being close-by.

A large manufacturer in Tokyo had implemented various means for women in supporting them to balance work and child raising but could not keep them from retiring upon becoming pregnant or having a child, which forced the company to revise ways of working, including for men. Upon each worker making a list of tasks performed every month, there were a number of useless tasks recognized. Rescheduling of the tasks to be performed has resulted in less overtime work, benefiting both the company and the employees - a realization of WLB.

Avoid vertically segmented policies and consolidate them into a package

On of the aims in introducing white-collar exemption is the realization of WLB by allowing each worker to seek efficient working methods autonomously. But in order to avoid social disruption and to realize the true intention of WLB smoothly, certain conditions, such as clear definition of the assignment and fair and proper achievement evaluation are essential. Management and labor must discuss work styles and methods in specific terms so as to satisfy these conditions.

As WLB is, after all, a way of life, implementation will become most effective when community based activities are undertaken. There are already a number of local governments that have come up with trilateral agreements with management and labor of local companies integrated to child support. Those local governments are also introducing, advising, and disseminating examples of worthy implementation of WLBs in companies. Companies will inevitably recognize the necessity of the WLB when other good job-opportunities are offered in the region and face a tough time hiring people.

Analysis of the implementations of the WLB in Europe and the U.S. shows that the localized strategies to create jobs are most effective when plans incorporate regional characteristics and realities, which is then supported by the central government in terms of funds, information, and personnel. In reality, it is preferable to create a system to locate someone, either locally or from outside, who would function as a local key person.

It will become necessary for the national government to be involved if such challenges were to be made a megatrend throughout the country. For example, while starting out with policies to tackle the difference between regular and nonregular workers, and to enhance capability development assistance, other issues eventually may become necessary, including reforms of taxation and social welfare system and linking with industrial and education policies. It is necessary, therefore, to establish a "basic law to promote realization of work-life balance" by first drawing a grand design of future Japan, and stipulating what must be done by each of the government, management, and labor sectors. The ministries and government agencies must share the principle, eliminate the negative effects of vertically segmented policymaking, and develop a concerted package of policies to realize the vision.

(The original Japanese article appeared in the February 2, 2007 issue of Nihon Keizai Shimbun.)