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Japan – Labour shortage fuels growth in permanent workers

The number of permanent jobs in Japan grew by 260,000 in March when compared to a year ago, rising for the first time since the global financial crisis and outpacing growth in temporary jobs over the past two years.

Data from the Internal Affairs Ministry shows that part-time, temporary and contract jobs rose by 170,00 over the year in March, below the 260,000 for permanent jobs. Last year, 510,000 permanent jobs and 360,000 non-regular ones were added.

“The labour shortage has become so bad that companies can’t fill openings only with part-timers,” Junko Sakuyama, a Tokyo-based senior economist at Dai-ichi Life Research Institute told the Japan Times.

According to the Japan Times, a shift back toward permanent hiring could help sluggish consumer spending pick up. Economists say a decades long move toward non-regular jobs is partly to blame for weak consumer demand.

Labour ministry data showed that the ratio of non-regular workers in the workforce stood at 37.5% in 2016, the highest since 2002.

Regular workers get paid about 53% of the salary of non-regular ones on a comparable monthly basis, according to the Labour Ministry, however they’ve seen slower pay increases because the unions representing them often favour job security over aggressive bargaining.

Sakuyama states that an important challenge for Japan would be to ensure ‘equal pay for equal work.’