Employment Flexibility and Joblessness in Low-Growth, Restructured Japan

Today, with the longest recession since World War II, unemployment is a growing fear among Japan's 52 million wage and salary earners. White-collar employees now outnumber blue-collar employees, and the labor force is increasingly mobile. As the structure of Japan's economy continues to change, Japanese labor markets are especially vulnerable to deterioration, without job creation sufficient to overcome job losses. Only a minority of workers have lifetime employment. Measures taken by government, employers, and worker organizations to support full employment in Japan go back 20 years. This three-way consensus successfully smoothed the way from production-first policies of the first two decades of post-World War II Japan to moderate growth, which emphasized equity and equality as well as full employment. The Japanese economy now seems to have entered a new phase, with the principal actors in the system of industrial relations, government and organized labor along with business, undergoing a restructuring that may undermine the long-standing consensus. This article examines institutions that have underpinned full employment in Japan, with an eye to changes now occurring.