No.34,Summer.2001

Problems of "Emergency Economic Package"

By Kenji IMAMIYA

In response to the U.S. Strong Demand

      First of all, I want to speak of my impressions about the Japanese government's "Emergency Economic Package" published on April 6 in two points.

      One thing is that the government drew up this economic package under an intense pressure from the United States. Some say that the new U.S. administration under President Bush is not so coercive toward Japan as the former Clinton administration. There was, in fact, a report saying that in the G7 finance ministers and central bank governors meeting held in Palermo, Italy, on February 17, Japan was not criticized very much. Behind the appearance, however, an immense pressure was put on the Japanese delegation. The G7 statement, recognizing the necessity of Japan's economic recovery, calls on Japan to further easy-money policy and strengthen the financial sector. The behind the scenes, it is said, the US Finance Ministry was pressurizing Japan, stubbornly demanding Japan should accept a structural reform which included the immediate write-offs of banks' bad loans to help increase U.S. direct investment in Japan.

      This is obvious when you look at the moves of the Japanese government. On February 16, Financial Service Agency Minister Haruo YANAGISAWA publicly spoke of a policy to encourage banks to directly write off bad loans from their books. After the G7 meeting, on February 20, he officially announced this policy. On 22, with the Tokyo stock prices falling below 130,000, the government brought to the fore the policy to increase stock prices in connection with the clean up of banks' non-performing loans. In this way, the Japanese government drastically changed its policy held since 1992 of promoting step-by-step the disposal of bad loans of financial institutions.

      The U.S. pressured Japan to accept its demand so strongly because: 1) it considers its relations with Japan in terms of U.S. security, as part of U.S. world strategy; 2) U.S. economy was rapidly aggravating; and 3) it wanted make Japanese market further accessible for U.S. financial institutions. Under an inexorable pressure from the U.S., Japan's newborn Koizumi cabinet will most likely to implement the emergency economic package to a maximum degree.

      Another thing that drew my attention was a pressure against free speech in this regard. An article entitled "Horrible personnel management of Nihon Keizai Shimbun Inc.," published in Weekly Asahi of April 27 unearthed the problem. The article said that on March 10, the following day of the announcement of an emergency economic package as a government draft by the Liberal Democratic Party, the Komei Party and the New Conservative Party, The Nihon Keizai Shimbun carried an editorial entitled Emergency Package amid Confusion. The editorial pointed out the proposed emergency package, hastily and therefore poorly made, failing to clarify who was in charge to implement it. It went on to say that the proposed package proved to be a mere remedy for prolonging the life of the Mori cabinet. Takuhiko Tsuruta, president of the Nihon Keizai Shimbun Inc. (Nikkei) was infuriated at the article, and demoted the editorialist who wrote it to the Nikkei Research Institute of Industry and Markets, said the Weekly Asahi. The Weekly Asahi also reveals a phone call from Shizuka Kamei; the then LDP chairman of the Policy Research Council, to Tsuruta was the trigger to this incident. The truth remains unknown, but such an oppression of free speech taking place with regard to the economic package makes, so to say, a symbol of Japan's staggering economy, and I think this is a very dangerous trend.

Contents of the Package

      Now let me get onto the main subject. First I'll explain the contents of the government's economic package. The package has two chapters; the Chapter II, which puts forward specific measures, should be of our chief concern. The Chapter II is composed of five parts: 1) Revitalization of the Financial and Corporate Sectors, 2) Structural Reform n the Securities Market, 3) Urban Revitalization and Increasing Liquidity in Land Assets, 4) Creating Jobs and Enhancing the Safety Net for the Employed Workers, and 5) Tax System. The time is limited, so today I will focus on the part one. Part one is made up of two sections; the section one refers to the integrated resolution of the problems of non-performing loans of banks and excessive debt of corporations, and the section two deals with the limitation on shareholdings of banks. In short, the part 1 treats as important two questions. One thing is how to push forward the write-offs of banks' non-performing loans, and another thing is how to set up a stock-buying body.

      Looking into the part one it is features by two points regarding the ways to be applied to getting rid of bad loans. First is the promotion of direct disposal of bad loans within a definite period of time. Second is the stretched interpretation of the Law on Special Measures for Industrial Revitalization, which allows it to be applied to the cleanup of non-performing loans. It set a time limit for those already classified as bad loans at within the next two fiscal years, and for those newly classified as such at within the next three fiscal years. According to the calculation of Tokyo-Mitsubishi Securities, an average of seven trillion yen a year is in non-performing loans produced for these three years. In fiscal 2000 ending September alone, about 3.6 trillion yen were added to the existing bad loans. Anyway, we never know exact amount of bad loans, because banks have not disclosed the details fully. The Nihon Keizai Shimbun of April 16 reported that the government had started considering mandating banks to disclose such details.

      About the limitation on banks' shareholdings, two points characterize the package. One is a limit on the gross amount of stockholdings by banks. The package says that framework should be created to limit banks' stock holdings within the range of banks' ability to manage risk, for example, to the equivalent of the bank's capital. Another is to set up a stock-buying body. Named provisionally the Bank Equity Purchasing Corporation (BEPC), the body will not buy shares of all industries but exclusively of banks'. Involvement of the Deposit Insurance Corporation of Japan and other support from the public sector such as a government guarantee to funding BEPC's share purchases will be considered. The package says that to determine a concrete plan to establish this system, a detailed final plan including legal schemes required will be developed, which leaves room for a government support, that is, investment of tax money to bail out the loss in share-purchasing.

      That's the main point of the government economic package about revitalization of finance. I want to mention briefly the difference between this package and the ruling coalition parties' plan published on March 9. The Emergency Economic Package is much the same as the ruling-parties' policy in the basics, but has various points added to it. From the outset, the ruling parties' policy was very simple, roughly made. Based on this policy, the government and ruling coalition parties convened the first meeting of the emergency economic measure headquarters. After the meeting, government hammered out a series of plans, which were quite different in many respects from the Emergency Economic Package. For example, the former plans defined that a stock-buying body should not exist more than five years; the purchasing fund should be covered by emergency loans from the Bank of Japan and government guaranteed bonds; and one third of the investment in the body should be provided by the government. All these do not appear in the Emergency Economic Package, but referred to only as subjects to be examined. There was such a vast difference in opinions on these points that they failed to have an agreed conclusion.

Characteristics of the Package

      Now let us go into the characteristics of the package.

      First, its contents are substantially different from the previous ones; the government had implemented more than 10 emergency packages since 1992, when the bad loan problem came to the fore. The former packages contained measures centered on public works with budgetary means, which is not the case with the latest one. However, to deal with the disposal of non-performing loans, one should grasp properly the relationship between Japan's economy and such loans. Yet the package this time does not referred a word to it, and only pushes out how to write off them. This is a distinctive character of the package.

      To put the question of bad loans disposal on the agenda, the government must make clear the relationship between Japan's economy and such loans. Yet the government package this time does not refer at all to this question, but only pushes for bad loan write-offs. This is a distinctive character of the package.

      In calling for the disposal of banks' non-performing loans, how to view their@connection with Japan's economic situation is essential. The government thinks that an enormous amount of bad loans have caused a decline in banks' lending, worsening as a result Japan's economic situation. It says this is why Japan has not been able to find a way out of the economic recession for so long, and that early disposal of banks' bad loans is urgent. But if you consider the matter carefully, to attribute the decline in banks' lending to their bad loans is an absurd argument. In a way, banks lend money because of needs from society, it has nothing to do with whether they have bad loans or not. In their recent book Trap of Japanese Economy (Nihon Keizai Shimbun, Inc.), Keiichiro Kobayashi and Souta Kato argue that banks are unable to lend money not because of debts but of bad loans. They say that bad loans have undermined trust in the network among corporations, thus prolonging the recession facing Japan. In other words, they do not see the process as bad loans causing diminish in lending to prolong recession, but as bad loans causing the lack of trust among corporations and this is how the economic recession continues. Anyway, they share the government's viewpoint to put Japan's long-drawn-out economic recession down to non-performing loans.

      Should we really attribute the prolonged economic recession to bad loans? My answer is no, the reality is opposite. Obviously, the cause of the prolonged recession Japan has suffered since 1990s is the misgovernment of the LDP. Its reckless policy to waste huge money on public works has deepened Japan's fiscal crisis. Extraordinarily low interests rate paralyzing the financial market and plundering the people, increased burden imposed on the people by the consumption tax rate raise and reduction of social security, corporate restructuring based on wage cut and dismissals... All these are to be blamed for the present economic recession without a way out. Non-performing loans are the result. What is more, for these past ten years since the collapse of the bubble economy, the business circles and the government have not taken any serious measures to deal with bad loans. Had they made an earnest effort to resolve the bad loans problem, there would not have been such a huge among of bad loans as we have today. In this regard, we can say that the existing non-performing loans are not an aftereffect of the bubble economy but the consequence of the irresponsible, ineffective business management by major financial institutions and corporations over the last ten years. What is more, the government scheme of injecting 70 trillion yen to bail out banks of their bad loans has been of no use.

      Second, as I have mentioned earlier, the package proposes direct write-offs of banks' bad loans from their books within a definite timeframe, leaving the details and actual situation of such loans untouched. There are three categories of bad loans: 1) risk-management loans based on the Banking Law; 2) self-assessed loans according to the early warning system; and 3) disclosed loans under the Financial Revitalization Law. As for risk-management loans, for the fiscal year ended in March 2000, 31 trillion yen are in such loans all over the country and major banks hold 19 trillion yen. Of these 19 trillion yen, 13 trillion are extended to debtors that went bankrupt and to loans with delayed interest payments. About 60 percent of those bankrupt debtors are real estate agents, building contractors; distribution and service businesses, most of whom are small and medium sized enterprises. Drastic, direct disposal of bad loans by banks from their books will inevitably lead to massive bankruptcy of those small- and medium-sized enterprises. And there is no ground for the government's hurrying up the direct write-offs of banks' loans. Since 1992, Japanese banks have written off approximately 98 trillion yen have been written off in non-performing loans, and 80 percent of them, 54 trillion yen, were directly disposed of. It is an erroneous argument that little direct disposal of bad loans have been carried out.

      Let me speak about the problem of direct disposal of banks' bad loans.

      There are three ways of direct disposal: 1) by legal measures such as the Corporate Rehabilitation Law, Civil Reorganization Law and the like; 2) by debt forgiveness or debt cancellation; and 3) by selling bad loans such as securitization of bad loans. Any of these three ways will end up in the same result in three aspects.

      One, reorganization of major banks and corporations will be accelerated further. Banks have been merged into four big groups, but no one knows for sure how the things develop from now on. Each bank will naturally throw itself into a fierce competition among them. But at issue now is the internal strife of the merged banks over the management and personnel affairs are becoming ever more intense. This goes for the banks' affiliated corporations as well. No doubt that the prompt write-offs of banks' non-performing loans will be used to help the realignment of corporations into big business groups. Combined with the industrial revitalization, corporate reorganization will be accelerated through dismissals, restructuring, tax reduction, loans at low interest, and Corporate Spin-offs Law.

      Two, as I have mentioned earlier, small- and medium-sized enterprises, kicked out from of the corporate groupings, will be abandoned one after another. As a result, the very basis of Japan's economy may well be at stake.

      Three, the sales of bad loans will make it easier for U.S. financial institutions to make their way into Japanese markets. Foreign capitals have already bought Japanese companies at a low price, and without doubt, there will be more and more such buying. So-called "vulture funds" are watching for chances to prey on Japanese markets.

      Speaking of the third character of the government emergency economic package, I want to refer to the problem of a stock-buying body. This too, I have mentioned before, saying that the package remains very ambiguous on this issue because many different opinions were presented from the political and business circles. Why were there so many different opinions over the stock-buying body? Because it contradicts the "market-solve-it-all" theory, the government's fundamental principle. The contradiction is only natural, because the stock-buying body aims to artificially shore up the stock market, while advocating deregulation and liberalization. The package explains that the purpose of the proposed share purchasing schemes is not only to prop up stocks but also to help to stabilize Japan's financial system. But the outcome will be the same. Moreover, if the amount of shares big banks can hold is to be limited to the equivalent of the bank's capital, as proposed in the package, they will have to sell about 10 trillion yen in shares (in case of the bank's shareholdings stand at 45 trillion yen, and its capital, 35 trillion yen). Many questions will be raised; how to define the details of stock sales, what to do with the losses and profit from such sales, and so on. Masaru Hayami, Governor of the Bank of Japan, also stated that the proposed scheme has too many problems concerning ownership, responsibility of loss compensation, and the like. It is a matter of course that the scheme has met criticisms that it favors major corporations too much, or it is the waste of taxpayers'' money.

Problems of the Package

      Now I will talk about the problems of the package.

      First is the Japan's extraordinary subordination to the strong pressure from the U.S. is ever more visible.

      Second, it is noteworthy at the same time that the LDP, in its own way, tries to cope with the change in the make up of Japan's economy in some respects. That is, the package, while dealing with the dissolution of Japan as a construction-company-oriented state, aims to establish a system different from the present one centered wasteful, large-scale public works to serve the interests of major general contractors. Yet the promotion of reorganization of the construction sector was included in the package, and it is a serious problem that the package intends to preserve the traditional system based on major general contractors though reorganization, though in different form. It is identical to the fact that the newborn Koizumi cabinet makes no difference in the LDP's make-up, even after its out-dated political constitution had exposed to a critical situation.

      Third, the package is nothing but to serve the reorganization of large financial institutions and corporations as a useful instrument for the further strengthening of the system in favor of major corporations.

      Fourth, if the measures proposed by the package are carried out, there will be more jobless people and business failures, which will worsen the already bad living conditions of people, aggravating the economic recession. In the end, Japan's economy as a whole will head for wreck.

      In connection with this, I want to speak briefly about the Bank of Japan's policy of quantitative easing of credit. Without this credit easing policy, the emergency package cannot be implemented. This is the first time for the BOJ to carry out the quantitative easing easing, which has three purposes: 1) to make it possible to provide as much funds as required; 2) to create incentives for corporate investment by setting time limit for the implementation of the policy, which is until consumer prices turn to rise; and 3) to create conditions for generating inflation. None of these purposes can help to improve the people's living conditions.

      To conclude, I would like to present my view on what economic measures are needed to serve the people's interests. As we have little time left, please consult for the details my article published in Rodo-Soken News, No. 133. Here are basic ideas:

      1) The most urgent task to achieve now is to find a way out of the prolonged recession, and for this, it is of absolute need to increase people's purchasing power;
      2) Banks' function as money-lending agent should be restored immediately. Prerequisite for this is a full-scale information disclosure by banks, and transparency of banks' management is essential as well;
      3) The disposal of banks' non-performing loans should be carried out based on a full-scale disclosure of information and accountability of the bank, with due consideration is given to positions of all the parties concerned. Monitoring by people and above all, the establishment of a democratic government that has people's trust are all the more important.

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      The writer is Honorany Professor, Chuo-Univesty

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Gender Equality in Employment under Globalization

By Kazuko KAWAGUCHI

Introduction

      Equality between men and women as part of human rights and democracy is now recognized to be a vital task for the whole international community to achieve in the 21st century. This was confirmed by the outcome document of the United Nations General Assembly Special Session "Women 2000: Gender Equality, Development and Peace for the Twenty-First Century" (New York, June 2000).

      Pressed by the development of this internationally accepted idea and the growth of the global movement calling for gender equality, the Japanese government has taken legislative measures. It enacted the Equal Employment Opportunity Law that became effective in 1986 and made amendment to it to be enforced in 1999. It also established the Basic Law for a Gender-Equal Society, which came into force in 1999. In reality, however, the series of legislation has not helped much to eliminate sex-based discrimination deeply rooted in Japanese society. In an international comparison by "gender empowerment measure" conducted on 174 countries by the United Nations Development Program in 2000, Japan stood 41st in the 50 top countries in terms of women's participation in decision-making in political and economic activities, and wage disparity between men and women.

      Under the prolonged recession facing Japan since early 1990's and the "21st century strategy" promoted by the financial circles and the government for the build up of corporate international competitiveness to cope with economic globalization, Japanese workers' employment, wage and labor conditions are particularly deteriorating. The movement to achieve equality in work has entered a new stage.

      In this article, I will look into the actual situation and characteristics of gender-based discrimination in employment in Japan, using some data of international comparisons.

1. Actual Situation of Gender-Based Discrimination

1) Wage disparity, structural segregation of work based on sex

      Women have 40 percent share in Japan's labor force today. With more women receiving higher education (33.4 percent of the new hires with academic backgrounds are university graduates; and 30.3 percent, college graduates), and changes in substance of labor due to the technological progress, areas of work accessible to women have expanded. Furthermore, regulations as special protection for female employees on late night and overtime work by them were abolished according to the revision of the Equal Employment Opportunity Law.

      While the gap between men and women in their academic backgrounds, areas of work, and working hours are becoming smaller, women's average wages are still 60 percent of men's (49 percent if part-timers are included). Compared to 90 percent of Germany's; 80 percent of France, U.K and the Netherlands; and 70 percent in Australia, Japan's differential between women's and men's earnings is extraordinary. Japan is also outstripped by other countries in the speed in narrowing the gap. It has reduced such disparity only by 3 percent, while U.K. has lessened the gap by 10 percent (see figure 1).

      Gender gap is rather increasing in Japan for those employed by big corporations and those in advanced age. This is especially true of the financial and insurance workers, whose majority are women. In these businesses, the wage differentials have continuously been widening since 1990, and in 2000 women's salaries were 52.8 percent of men's, which means the gender gap in these areas are far larger than the average.

      "Glass-ceiling," discriminatory treatment of women in promotion, remains a serious problem as well. Women represent only 1.2 percent of general managers or the like, 2.4 percent of section chiefs or the like, and 7.8 percent of senior staff (Ministry of Labor, Basic Survey on Employment Management of Women, 1998). Even among national government employees, who are supposed to be guaranteed gender equality by law, women's representation in the executive staff of section chief level and above is only 1 percent of all, while the percentage of the United States and European countries is about 20 percent. In the first place, the Japanese women's share of the national government employees is no more than 32 percent, far below the level of U.K. (58 percent) and the United States (47 percent --- see figure 2)

      In the private sector, since around the enactment of the Equal Employment Opportunity Law, an increasing number of big corporations have adopted a separate track personnel management system. This system divides female and male workers into two categories: career-track employees assigned key duties with access to managerial posts, and non-career clerical staff doing routine work. There are disparities between the two groups in wages and pay rise. Companies explain that this "track-based management" fully depends on the types of duties, regardless of sex. However, the reality is different. In Y Electric Co., 99.9 percent of male university graduates and 34.4 percent of male high school graduates get on career track, while women' share is very small; only 48.0 percent of university graduates and 2.3 percent of high school graduates.

      No doubt that such sex-based segregation in employment, promotion and posting is a major cause of wage differentials between men and women.

2) Long, intensive work and reduced social welfare reproducing gender-based stereotypical segregation at work

      To achieve gender equality, it is indispensable to abolish traditional, stereotyped roles for men and women (as stipulated in the United Nations Convention on the Elimination of All Forms of Discrimination against Women and other international agreements). It is an international principle today to realize a society where men and women share their work and family responsibilities, enjoying equal participation in all areas of activities. With this end in view, Japan has established a new national law.

      Yet in Japan, the profile of female labor force participation rate by age bracket shows a "M-curve" pattern with the 30-34 age group at the bottom, because many women leave the job for childbearing and childrearing in this period. Such a pattern strikingly contrasts with that of "inverted V-curve" of European countries and the United States (see figure 3). The contrast comes from the fact that in Japan women bear 87 percent of housework and 50 percent of childcare (Prime Minister's Office, Public Opinion Survey on a Gender-Equal Society, 2000). These figures clearly tell us that stereotyped roles for men and women still exist in Japan and how difficult it is for women in this country to reconcile their work and family responsibilities so that they can continue working.

      This unfair burden imposed on women through stereotypes has produced gaps between men and women in the length of service and opportunities to display their ability. Under the traditional "Japanese-style" management centered on the seniority-based wage system and lifetime employment system, the length of service is the primary standards in evaluating one's labor. This has provided an effective excuse to companies to discriminate against women; they would say they cannot assign women key duties because of their short length of service, and therefore gaps between men and women in training and other opportunities are inevitable.

      Nevertheless, the above-mentioned survey by the Prime Minister's Office indicates a change taking place in the attitude of both sexes; an increased number of people think men should take part in housework and childcare. As necessary measures to make this possible, men of the 20-40 age group, who are in the prime of life, demand first and foremost the reduction of working hours. These data shows that the stereotyped roles for men and women are not only attributed to the backward attitude and the traditional practice of prewar times persisting in Japanese society due to the immature democracy. Rather, long and intensive labor that has caused in many cases of karoshi, death from overwork, is a major factor obliging men to give up their family responsibility, like it or not, thus imposing dual burden on women.

      The abolition of the protective measures for women limiting their late-night and overtime work without addressing such a reality has made it even harder for women to carry out their dual duties, that is, reconciling work and family responsibilities. It has become ever more difficult for them to continue working. Destructive effects on their maternity are also serious, as seen in the increase of abnormal deliveries.

      On top of these, the social security system including medical care, pension, childcare and welfare for the elderly has consecutively been changed for the worse. Restricted access to day care centers has produced 33,000 "children on the waiting list" throughout the country. The Child Care and Family Care Leave Law was enforced, yet due to the small amount of benefits provided during the leave months (25 percent of the wage), and particularly to the inadequate length of period under guarantee of benefits (only three months for the family care leave), the system is not being used fully. Such a reduced level of social security has helped to perpetuate and reproduce stereotyped roles for men and women, forming a basis for gender discrimination in employment as well as for a rapid decline birthrate in Japan.

2. Revision of Equal Employment Opportunity Law and Realignment of Gender Discrimination

      Today, Japan's business circles and government are jointly pushing ahead with a strategy to cope with globalization; companies are reviewing the traditional seniority-based wage and lifetime employment systems, to reshape the "Japanese-style management" through personnel cut and efficient use of labor force based on the "principle of competition." With this new method for intensified exploitation, companies are smartly taking advantage of growing demand for gender equality to use female workforce effectively, which means further discrimination against women at work.

1) Gender discrimination by job performance-based individual management and personnel assessment

      First, companies are changing their personnel management. For workers in the same company, sex and academic backgrounds have been common standards for their wages and promotion. But from now on, companies will evaluated workers individually based on their job performance and achievements, so as to "give workers incentive through a mechanism that their income would drastically increase or decrease according to their labor" (the Japan Federation of Employers' Associations, Nikkeiren, Report of the Labor Issue Study Committee, 2001).

      A company will assess each employee's performance and achievements in grades, to what degree one has accomplished his/her duty assigned in line with the business goals (many companies use the five-grade system). The assessment result will determine whether the worker gets a pay rise and promotion or downgrading instead. Such "individual personnel management" and "achievement-based management" will allegedly provide equal employment opportunity for men and women. However, in assessing the other, one cannot be free of his/her personal, arbitrary opinions. And as long as the downsizing is the most urgent requisite for the management, discrimination against women will be preserved in the name of assessment. More seriously, discriminatory treatment against women will become invisible, while the management insists that the gap is the result of the difference of duties and performances.

      For example, Ms. Y, a "career-track" employee of a financial institution in Osaka, was evaluated two grades below her male counterpart of the same academic background and the same length of service. Her monthly salary was 110,000 yen less than his. The company explained that the difference in treatment was a result of the difference in duties and her irreverent attitude about work, such as refusing to do cleaning or to serve tea. In objection to such an allegation, she filed a suit against the company to the Osaka District Court for discriminatory treatment in 1997. But the court dismissed the case saying that it found no sufficient evidence for the plaintiffs' claim on her eligibility for equal treatment with her male counterpart.

      Another example: the Japan Air Line's 25 female flight attendants applied for mediation, calling, based on the revised Equal Employment Opportunity Law, for redress of discriminatory treatment against women in promotion. The mediation proposed by the Labor Ministry's Tokyo Metropolitan Women and Young Workers' Office, without probing into the company's personnel assessment, simply called on the company to give "a due explanation to the applicants about the evaluation results and concrete goals to be attained for promotion." Of the women applicants, it demanded "efforts to make achievements in performing the duties in accordance with the company's system and policy." It was only natural the women refused to accept the mediation.

      While cleverly helping to perpetuate gender-based discrimination, the "individual merit-based management" is escalating competition between men and women, and among women themselves, thus creating an environment in which workers are obliged to give up their rights to paid holidays, and to childcare and nursing leave. In this way, it promotes "voluntary" intensification of labor by women and men workers.

2) Gender discrimination at the back of increase in unstable employment among women and change in their employment patterns

      Second point of the corporate strategy is the promotion of flexible employment patterns, to accelerate labor mobility. In response to the increase in the fields of unskilled labor due to the expansion of tertiary industries and "IT revolution", they adopted a policy of "right person in the right place, only when necessary" (Nikkeiren, "Japanese-style Management" in a New Era, 1995). They are pushing forward diversification of employment forms, hiring more unstable workers at low wages, such as part-time, dispatched, temporary, contracted and tele- workers, in place of regular staff including specialists except those who are assigned key duties.

      As mentioned above, Japanese women's work force ratio by age bracket shows an "M-curve" with the 30-34 age group, who are in the period of childbearing and childrearing, at the bottom. Most of those returning to work after the leave become part timers. The individual, performance-based management has opened equal access with men for those women winning through the competition, to promotion and higher wages. But at the same time it acceleratingly leads many women unable to bear the harsh intensification of labor, particularly those married, to choose unstable employment. In fact, more than 70 percent of part-time workers, mainstay of varied types of unstable employment, are women, many of whom are married. This constitutes a peculiarity of Japan's labor patterns. The ratio of non-regular workers of all employment forms has risen up to 46.4 percent, almost half of the whole female labor. This makes a sharp contrast with men's ration, which is 14.9 percent (Ministry of Labor, General Survey on Actual Situation of Diversification of Working Patterns, 1999).

      Based on the recognition that the use of female labor force is essential to reviving Japan's economy, the Japanese government is taking measures to increase unstable employment in support of the corporate policy in the name of "promoting diverse ways of work to help to reconcile work and family responsibilities."

      For these non-regular workers, their employment is unstable; their contract term is short and/or terminable, that is, they are easy to be dismissed according to the economic conditions and at the company's disposal. Further, their average month wages are about 140,800 yen, even less than the initial salary of regular female high school graduates, which is 148,300 yen. Being unorganized into labor unions, many non-regular workers are hardly guaranteed the rights to retirement or severance allowances, to social insurance, and to maternity, child care and family care leave. The Japanese government has not yet ratified the ILO Part-Time Work Convention (1994), which stipulates that part-time workers should receive the same protection as that accorded to comparable full-time staff in respect of the right to organize, occupational safety and health, an equal basic wage calculated proportionately on an hourly basis. Japan's national law called the "Law concerning the Improvement of Employment Management, Etc. of Part-Time Workers" is just as well helpless in improving such precarious conditions of non-regular workers.

      We can safely say that the rapid increase in low-waged, right-less unstable workers, mostly women, with the striking disparities between regular and non-regular workers being left untouched, constitutes a form of gender-based discrimination under cover of differences in employment forms.

3) Limitations of the revised Equal Employment Opportunity Law

      The revised Equal Employment Opportunity Law prohibits any form of discrimination against women on the basis of "being women" in all stages of employment from recruitment and hiring, transfer, training, mandatory retirement age, retirement and dismissal. New provisions were added on the prevention of sexual harassment against women and the promotion of positive actions (special measures favoring women to redress discriminatory treatment against them). In this way, the revised Equal Employment Opportunity Law is more strict than the previous law in terms of regulating discriminatory treatment and implementing measures to correct it, though all those provisions only call for compulsory measures to be taken by employers with no penal regulations.

      Despite the improvement, the revised Equal Employment Opportunity Law is still ineffective to combat "indirect discrimination" created by the achievement-based management and by the employment patterns. Japan lags far behind other countries in legislation. The updated European Union Council Directive on the Burden of Proof in Sex Discrimination Cases (97/80/EC) which came into force in January 2001, clearly defines indirect discrimination on the basis of an "apparently neutral provision, criterion or practice." It shifts the burden of proof to the employer in a labor-management dispute concerning equal treatment.

3. Toward Gender Equality: Present Situation of the Movement

      Along with the lifetime employment and seniority-based wage system, in-house labor unions have served as mainstay of the "Japanese-style management." The tendency of many of these unions to collaborate with the management has made it difficult for women employees to fight against sex-based discrimination at work, a vital factor in companies' profit making. This is why in many campaigns for the redress and abolition of sex-based discrimination; women have brought their cases to court. Since as early as 1960's, women workers have won the cases of direct discrimination associated with marriage and maternity such as a women-only retirement system. But due in part to lack of effectiveness of legal measures, court struggles to end discrimination based on sex is facing new obstacles, as explained above.

      Yet we can see a new progress in the movement that has never seen before.

      Fourteen years ago, thirteen female employees of Shiba Credit Bank filed a suite against the company calling for the redress of sex-based discrimination in wages and promotion. Supported by the trade union (affiliate of the National Confederation of Trade Unions, Zenroren), the women plaintiffs for the first time won a court decision that ruled the company should verify their positions and promote them to the equal status as their male counterparts, which would accompany wage increase (Tokyo High Court, 2001). It was an epoch-making decision; a great step forward compared to the judicial precedents given so far, which acknowledged the discrimination against women on the part of the companies but limited themselves to order the management to pay damages. Shiba Credit Bank, turning its back to the court decision, appealed to the Supreme Court. The struggle is not over yet.

      In Nagano Prefecture, women part-time workers of Maruko Keihoki, a car parts company won a victory after a six-year struggle in court against wage discrimination, through the out-of-court settlement mediated by the Tokyo High Court. Twenty-eight female temporary workers, members of Maruko Keihoki branch of the All-Japan Metal and Information Machinery Workers Union (Zenroren affiliate), had been claiming that they received unfairly lower wages than the regular employees did. The victory was a big achievement, because it was the first lawsuit against pay gap. Almost all the court struggles by temporary workers before them only dealt with unfair dismissals. What is more, the judgement itself was of major importance. The Ueda District Court decision upheld the idea of universal equal treatment that "all people should receive equal reward of their labor." And the Tokyo High Court required the company to give the temporary workers extra allowances to fill the pay gap, and to provide the same wages as well as the same mid-summer and year-end bonuses as those received by the regular staff.

      These victories have encouraged many other working women, rallying them around the movement for the amendment of the Equal Employment Opportunity Law and the Part-Time Law. Sex-discrimination-check or no-tolerance of sexual harassment campaigns are spreading in workplaces. Both Zenroren and Rengo (Japanese Trade Union Confederation) have established at the executive level gender equality promotion committees. To achieve equal treatment for part-time and regular workers, they place special emphasis in this year's Spring Struggle on increasing part-timers' hourly pay. Trade unions now give much more attention to those problems they used to leave in the hands of women's sections, putting them on the agenda to be tackled by the whole union members irrespective of sex. This is also a new progress.

      As the principal measures to counter the globalization strategy of the business circles and the government under the law of the jungle, Zenroren is redoubling its effort to win the revision of the Labor Standards Law to achieve shorter working hours and common regulation on late-night and overtime work by men and women; the enactment of a dismissal control law; and the establishment of a national minimum wage system with increase in the local minimum wages. All these are part of Zenroren's policy to "establish work rules worthy of human beings." To realize this policy, Zenroren is carrying on the movement to promote "dialogue and cooperation" among all workers, regardless of what company one works for or of union affiliation.

      This movement is essential and important for the achievement of genuine gender equality in Japan as well. The advancement of such a movement can provide an impulse to remake Japan's in-house unions on sweet terms with the management into democratic, class-based unions.

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      The writer is Standing Director, Rodo-Soken

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