German and Japanese labor market in the era of Globalization

Abstract

One important character of the labor market of both countries was the coexistence of the regular workers in the core industry and the irregular workers in the periphery industries. The regular workers of the key industries and governments offices were under life time employment and seniority system. They were protected by the employment law. On the other hand, the irregular workers of the marginal or periphery sectors had not enjoyed those systems and were not protected by such protecting employment law. We have relatively big sectors of small and middle enterprises such as groceries, clothing and parts maker for the car and the electric industries in Japan and these sectors employed many irregular workers. As the globalization after 1990 compelled the competition among the enterprises of each country, they had to reduce the cost of their companies. Therefor they intended to reduce the regular workers and increase the irregular workers. Each government promoted this tendency and did ease restriction of the labor market. In Germany the Prime Minister G. Schroeder announced “Agenda 2010” and began the Hartz Reform in 2002. This reform involves ease restriction of employment law and some reduction of Social security. In Japan the Workers Dispatch Law were changed from 1990 several times and the enterprises could easily dispatch the regular workers and employ more irregular workers such as dispatched workers, contract workers and part-timer, In 2006 the enterprises of manufacturing could employ the dispatched workers and so the one third of workers of manufacturing became the irregular workers specially the dispatched workers. But these dispatched workers were not protected by employment law and the basic social security. So when the international financial crisis attacked the industries in September of 2008, they were laid off and became often home less under worse social security. There is a difference between Germany and Japan on the evaluation of the dispatched worker. In Germany they think this worker as a bridge from irregular worker to regular worker. But in Japan they think this worker as irregular worker and it is difficult for him to become a regular worker. In this paper we would like to discuss at first the parallel development of Germany and Japanese labor market, second to explain the Hartz Reform in Germany and Japanese deregulation of the dispatched worker law and compare both reforms, at last to think about the problems of the irregular worker through comparing the Germany and Japanese labor market.