The Setback in Political Entrepreneurship and Employment Dualization in Japan, 1998–2012
| Date | 01 September 2016 |
| Published date | 01 September 2016 |
| DOI | http://doi.org/10.1111/bjir.12132 |
| Author | Ji‐Whan Yun |
British Journal of Industrial Relations doi: 10.1111/bjir.12132
54:3 September 2016 0007–1080 pp. 473–495
The Setback in Political
Entrepreneurship and Employment
Dualization in Japan, 1998–2012
Ji-Whan Yun
Abstract
Scholars are mainly concerned about how policy makers in advanced countries
have succeeded in dualizing labour market regulations in a way to realize
their vision or to represent powerful industrial interests. However, Japan’s
recent experiences suggest the possibility that this dualization is not such
a straightforward outcome. This study argues that as Japan’s political
entrepreneurs have undergone setbacks in their reform attempt to overcome
the tradition of employment dualism, they have improvised to close the reform
process byinstitutionalizing this tradition. This study corroboratesthe argument
by investigating state-industry conflicts overthe revisions of the Worker Dispatch
Law in 1999, 2003 and 2012.
1. Introduction
In recent decades, many advanced countries have dualized labour market
regulations for employment security and welfare protection to achieve
labour flexibility and welfare reduction (OECD 2008). Japan is not an
exception to this trend of labour market dualization. In the past, informal
practices of industries to meet their diverging needs created Japan’s labour
market dualism (Rebick 2005). With a large financial capability, as well
as a commitment to exporting high-quality products, large firms oered
regular workers lifetime employment and invested in sta skills and training.
Smaller firms hired the majority of non-regular workers to cope with
rising labour costs. A remarkable change since the late 1990s, however, is
that Japanese authorities have kept formalizing these practices. When the
Liberal Democratic Party (LDP) government was in power, new regulations
were created to institutionalize employment security for regular workers.
The Labour Contract Succession Law was established in 2000 to protect
employment status in cases of business mergers and acquisitions. The LDP
Ji-Whan Yunis at the Department of Political Science, Ewha WomansUniversity.
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474 British Journal of Industrial Relations
FIGURE 1
The Proportion of Non-regular Workers to the TotalWorkforce in Japan.
Source: Osawaet al.(2013)
Note: (M) & (M): men’s shareamong the each type of non-regular workers in 1992 and 2007,
respectively; (F) & (F) women’s share among the each type of non-regular workersin 1992 and
2007, respectively.
government revised the Labour Standards Act (LSA) in 2003 to codify
case law that prevented arbitrary dismissals. Concurrently, this government
formulated newrules for the wider use of the non-regular workforce.The 2003
LSA revision provided employers with favourable regulations regarding the
use of fixed-term workers. The Worker Dispatch Law (WDL) was amended in
1999 and 2003 to allow fora flexible dispatch of workers.During the three-year
reign of the Democratic Party of Japan (DPJ) from 2009 to 2012, meanwhile,
no eective revision wasmade to the dualiz ed employmentstructure. The DPJ
government considered several measures to improve the working conditions
of non-regular workers, but it failed in most cases.
Japan’s regulatory reforms towards employment dualization have not been
a smooth process. The reforms had to be carried out when labour inequality
emerged as a serious social concern (Hara 2010: 68–71). As firms restrained
themselves from oering regular jobs to new graduates, the number of regular
workers declined from 35 million in 1995 to 30 million in 2012 (Ministry of
Heath, Labour and Welfare [MHLW] 2012: 120). Meanwhile, the proportion
of non-regular employment has increased from20.5 per cent in 1995 to 35 per
cent in 2012 (MHLW2012: 120). Figure 1 shows that middle-aged men as well
as women have become non-regular workers, challenging Japan’s traditional
ideal of the male breadwinner. The income gap between regular and non-
regular workers has also grown. Between 1995 and 2005, the income ratio of
non-regular to regular male workers fell from 55.3 per cent to 50.6 per cent
(MHLW 2006; Ministry of Labour [MOL] 1996).
Also, the labour market emerged as an important issue area in which
party competition became intense. Some politicians have advocated a
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2015 John Wiley& Sons Ltd/London School of Economics.
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