Japan’s Contested Labour Market Reform

Abstract

ABSTRACTOver the past few decades, Japan’s labour market has faced substantial changes, represented by flexibility, an increase in the proportion of the non-regular workforce and rising inequality. Under the intense pressure of fluctuating business environments and protracted recession, Japan’s policy-makers have sought to resuscitate the troubled economy by further liberalising the relationship between capital and labour while also seeking to reduce widening inequality by providing social safety nets and protection for workers. This article examines the government’s labour market reforms since the late 2000s in response to these challenges. It argues that patterns of policy-making – centralised versus decentralised – have determined the political dynamics of labour market reform. More specifically, three aspects of decision-making – the role of the centralised policy-making agency, party-cabinet relations and legislative control in Diet – have explained the scope of the reform, although the reform target along the lines of employment status has affected the political process and outcome to some extent.