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Kazuo Matsumaru

Kazuo Matsumaru [Profile]

Restoring Employmentism

Kazuo Matsumaru
Professor of Social Policy, Faculty of Economics, Chuo University

What happened to the “happy” generation?

Japanese who are currently in their sixties enjoyed a period of high economic growth and full employment at one point as they were beginning their careers. Along with this economic growth came employment opportunities and higher wages. As a result, people prospered and had dreams of living a “happy” life. University students who are in their twenties today, on the other hand, were born when Japan's bubble economy burst. Far from being able to expect future economic growth, yearly salary increases, or other such desirable circumstances, these students are extremely worried about their career paths and about finding employment after graduation. Students are starting to shift their focus away from job hunting books and towards career design books.

What happened to our economic whizzes?

When the bubble economy burst in 1990, Japan's overall unemployment rate ranged from 2.0 to 2.2%. The average overall unemployment rate from April 2009 to March 2010 was 5.2%, more than twice that in 1990. The total number of unemployed grew 680,000 more from the previous year reaching 3,430,000, the largest one year increase in history. For the past three years, the percentage of underemployed workers, now commonly known as the working poor, hovered around 33% to 34%.

One salient development during the recovery process in the wake of the Lehman Shock—the devastating bankruptcy of Lehman Brothers in the fall of 2008—was that, while major nations including Japan showed negative real GDP growth rates in 2009, the real GDPs of China and India grew by 8.7% and 5.7% respectively for the same period. Japan had the second largest negative GDP growth rate of -5.2% next to Russia, which had a negative GDP growth rate of -7.9%. What happened to the economic whizzes that helped us quickly recover from the two oil shocks that occurred during the 1970s?

A clarion call on the jobless recovery

We must return to the fundamentals of the globalized economy. The goal of capitalism is to maximize return on investment, and while there are many different ways to define the meaning of employment, basically people work in order to live. These fundamentals do not change, irrespective of the levels of investment and employment—be they regional, domestic market, transnational economic sphere, or even regarding the entire world as a single global economy.

2010 economic growth forecasts for countries around the world have begun to be released. Analysts are hoping that the worst is behind us and that we will return to a growth track. The warning signs are apparent, however, in the jobless recovery which has occurred since the start of the 21st century.

Five jobs pacts proposed at the G20 Labor and Employment Ministers' Meeting in Washington

The following five jobs pacts were offered for consideration by the leaders of member nations at the G20 Labor and Employment Ministers' Meeting held from April 20 to 21, 2010.

  • 1. Accelerate job creation to ensure sustained recovery and future growth
  • 2. Strengthen social protection systems and promote inclusive active labor market policies
  • 3. Place employment and poverty alleviation at the center of national and global economic strategies
  • 4. Improve the quality of jobs for citizens
  • 5. Prepare our workforces for future challenges and opportunities

Leading off with the work objective of “providing decent work for everyone,” Director-General of the International Labour Organization (ILO) Juan Somavia held that he would welcome five job pacts that are in accord with the aims of the ILO, but at the same time he stressed that, “a sustainable recovery is impossible without a robust recovery in employment.” In January 2010, Mr. Somavia made the following statement resolutely supporting this premise: “Avoiding a jobless recovery is the top priority among the measures of the day, and it is vital that we create jobs and support people in their livelihoods with the same determination that was seen in the bank bailout measures.”

Employmentism: the bedrock of the economy

The slogan work (employment) for all has been the leading economic policy issue in the past, and it continues to be in the present as well. To borrow an ILO phrase, this means the creation of decent work—work that is personally rewarding and fulfilling. In Japanese, people tend to think that the meaning of the word koyo (employment) is equivalent to hiring people to work. However, koyo also includes self-employment, and company executives are officially people who are hired to work.

The super-wealthy hold the bulk of the nation's wealth, and so long as they do not distribute this wealth in an autocratic manner amongst citizens, for the majority, work (employment) is the primary means of earning a living and the basis of economic activity. Official statistics tell us that there are 3,430,000 people in Japan who have searched for but cannot find work, despite their willingness to work and their abilities.

The purpose of economic activity is to guarantee a stable life for the largest number of people possible and to guarantee the right to the pursuit of happiness. The central focus of economic policy is to guarantee employment for people who work to achieve those goals in order to obtain the income necessary to live as human beings in society. In recent years, however, there is a widespread but shortsighted view that employment is merely an obstacle to profits and that it raises costs for businesses and government. This is why I intentionally use the provocative term “employmentism”.

It appears that there is no end in sight concerning the problem of Japan's falling birthrate and aging population. These are difficult times for the elderly, women, disabled, and children to live in. Under the present set of circumstances where the younger generation in particular has no dreams or hopes for working in the future, the time has come for policymakers and corporate executives to take the lead and bring us back to the road of economic activity to seek employment-based economic growth and the improvement of welfare.

Kazuo Matsumaru
Professor of Economics, Social Policy, and Social Security, Faculty of Economics, Chuo University
Research Topics: Employment Issues, Labor Market Policies, Small Business Theory, and Construction Policy.
Professor Matsumaru was born in Tokyo in 1954 and graduated with an undergraduate degree from the Economics Department at Chuo University in 1977. He left the Doctoral Program in the Graduate School of Economics at Chuo University in 1982. Professor Matsumaru became an Assistant Professor on the Faculty of Economics at Chuo University in 1981 and later became a full-time Lecturer. After serving as an Assistant Professor, he became a Professor on the Faculty of Economics from 1997 to the present. Professor Matsumaru served as Chairman of the Faculty of Economics and on the Chuo University Board of Directors from November 2005 to October 2009. His primary works include: Problems of Small Businesses amid Globalization (Editor and Contributor); Shin Nihon Shuppansha, 2005; and his theses: Small Business and Decent Work and Verification, Employment Policies under the Democratic Administration- Emergency Support and Job Creation. Professor Matsumaru has co-authored numerous other books and theses.