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Japan to Increase Workforce by 1 Million Over the Next 4 Years

Posted on 10/06/2016 by David Petrik

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Japan's Prime Minister has set forth an intiative to increase the workforce by a total of 1.17 million by the year 2020, just in time for the Toyko Olympic Games.

On Wednesday May 18th, the government revealed a draft of the plan to counter act Japan's increase of aging labour force by encouraging women and elderly workers. The plan includes details on a higher minimum wage along with a better system for child and elderly care "to promote dynamic engagement of all citizens.”

One of the main purposes is to also stop Japan's population from falling below the 100 million with the current population being 127 million. With a current workforce of 65 million, the fear is that without any targeted plan the workforce could drop as low as 40% by 2060 bases on a projection by the government. Since Abe was elected prime minister in January of 2013, the female workforce has risen from 47% to 50%.

The Japanese governement is still trying to avoid the choice of mass immigration by encouraging women to play a larger roles in business. A target of 30% of supervisory positions held by females is set to be reached by 2020. A growing concern is related to workers leaving their jobs in order to take care of elderly family member as around 7 million 'baby-boomers' move into their retirement age in the next 10 years.

"The government’s figure is challenging but it’s not impossible," said Masamichi Adachi, an economist at JPMorgan Chase & Co. and a former central bank official. "Baby-boomers are extremely healthy compared with people their age 10 or 20 years ago, and they can physically stay in the workforce longer. It’s also becoming more natural for women to stay in work."

Other details of te plan by the government include:

  • Will aim to raise minimum wages by 3 percent a year, seeking a national weighted average of 1,000 yen ($9.15)
  • Will seek pay levels for part-time workers no lower than those in Europe, and change laws to achieve equal pay for equal work

 

Source: Bloomberg