Japan Official Tells Firms To Remember Societal Responsibilities

ByBridgeNews Speaking after Japan's unemployment was announced at a historical high of 5%, Japan Finance Minister Masajuro Shiokawa said Japanese firms should take "the societal environment" into account when planning restructuring. Prime Minister Junichiro Koizumi has repeatedly said his administration will pursue a program to encourage drastic private-sector structural reforms that will necessarily incur bankruptcies and unemployment in the short-term. However, Shiokawa seemed to be backtracking on this policy objective in his Aug. 28 comments. "The government must strengthen the unemployment safety net. But, at the same time, given the pace of the hollowing out of Japanese industry, even strengthening the safety net won't be able to keep up with the unemployment problem. Companies have to adopt restructuring plans that are a little more in tune with the societal environment," Shiokawa said in a press conference. In particular, Shiokawa noted Toshiba Corp. and Hitatchi Ltd., two leading manufacturers of electrical machinery who intend to cut nearly 20,000 employees each, according to reports. "One after another they keep cutting personnel. I can't help but feel corporate personnel divisions are wrong to do this. We have to pursue economic recovery, but it's also the responsibility of companies to provide for the stability of the livelihood of this nation's citizens," Shiokawa asserted. Shiokawa said that Cabinet ministers discussed the issue Aug. 28 and decided the government should mobilize the roughly 57 billion yen (US$475 million) remaining in a special fund for employment measures in the event that unemployment exceeds 5%. Etsuya Washio, chairman of Rengo (Japanese Trade Union Confederation), Japan's largest labor union, met with Koizumi Aug. 27 to request employment measures to stave off unemployment expected to result from his administration's reform program. Koizumi has promised to spur major banks to write off all bad debts from their balance sheets within two to three years, a move that is expected to lead to banks foreclosing on firms and the loss of roughly one million jobs.