Deregulation for Unemployment

A consultative committee in the government of Japan, Regulation Reform Conference, submitted a new report on economic deregulation. It proposed a new rule for paving a way for employers to fire their employees in an unfair manner at least with compensation. While Japanese economy had been shrinking after Lehman Shock, labor market suffered from inappropriate employment, including extremely low wage or easy dismissal. In this stage of economic growth, the government stands by employer’s side.

In 2013, there were 195 court decisions that recognized unfairness among 966 lawsuits on employment dismissal. Although the winners of the lawsuits should be returned to the job they once belonged, they had actually been forced to leave it with variable uneasiness to remain. The committee thought that those employees needed to be saved with compensation, only when they accept it.

However, new rule may generate further unfair dismissal. According to the experts, there already is negotiation between employer and employee in a case of unfair dismissal, in which employer pays for compensation in addition to the amount court ordered. New rule may lead to discount of the compensation. While trade union was firmly protested against that rule, economic leaders have been lobbying for “deregulation” of unemployment. The committee approved their opinion for economic growth, which consequence would be unclear.

Other proposals were also trivial measures. One was to lowering the wall between hospital and pharmacy. To deregulate the separation, the committee proposed to ease a rule that required public road or fence between hospital and pharmacy. Required time period for registering new designated healthy food was considered to be shortened.

A worker in barber could not work as a beauty salon worker, or vice versa, because of regulation in license. The committee reviewed the regulation and concluded that both workers could to both jobs, only if all the workers in both shops had both licenses. In the field of agriculture, it recommended new taxation on abandoned land. This is a unique idea of introducing taxation for deregulation, because taxation is an extreme version of regulation.

All those measures are not based on fundamental review on regulations themselves, but minor discount of huge amount of regulations. This is a clear reflection of power structure of governance in Japan. In other words, regulations are tools for bureaucrats to rule the people. Politics and economy have not overcome that solid system. It is obvious that as long as political leaders leave this issue to a kind of consultative committee, real deregulation for sustainable economic growth and international credibility for Japan’s openness cannot be achieved.

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