Japan Inc braces for labor reform, plans to boost productivity -Reuters poll
By Tetsushi Kajimoto
TOKYO (Reuters) - Japan's plans to implement more employee-friendly laws are set to prove painful for many companies, with half saying labor costs will rise and two-thirds considering ways to lift productivity to offset the impact of the reforms, a Reuters poll showed.
Graphic: Japan Inc braces for employee-friendly labor reform - tmsnrt.rs/2pIv0Xj
Prime Minister Shinzo Abe's government last month endorsed an action plan for sweeping reforms of employment practices, including caps on overtime and better pay for part-time and contract workers.
The proposals, which may come into effect from 2019, will only add to strains already being felt as firms grapple with a deepening labor shortage due to a rapidly aging population. That said, more pressure to boost productivity is seen as long overdue and could boost growth in the long-term.
"Coming on top of labor shortages, Abe's plan will cause declines in sales and profits. We have done what we can in terms of streamlining," wrote a manager at a machinery maker, one of the nine percent of firms which saw a considerable jump in labor costs.
The Reuters Corporate survey, conducted April 4-17, showed 41 percent saw costs rising somewhat, while 38 percent expect no change and 11 percent forecast that labor costs will decrease. Continued...