Japan’s Abe tackles labor inequality at the center of his policy agenda

When Fumiko Kasai returned to work a decade ago she found Japan’s job market was very different to the one she had left in the 1980s to raise her four children.

Kasai, who had enjoyed a well-paid full-time job with a car firm before giving up work when she married, is now a temporary worker at a butcher’s. Earning 200,000 yen ($1,835) a month, her hourly pay is around half that of a full-time worker doing the same job.

Prime Minister Shinzo Abe has put tackling Japan’s labor inequality at the center of his policy agenda as the number of temporary workers hits a record high, posing a challenge to his “Abenomics” stimulus package ahead of a summer election.

“At first I saw nothing strange about a housewife doing a low-paid part-time job,” 59-year-old Kasai said.

“But no matter how hard I worked, my salary would not rise much even as I bear the responsibility as a team leader. I don’t want employers to treat temporary workers as cheap labor force for the sake of cutting personnel costs.”

With part-time and temporary workers now making up about 40 percent of the labor force, Abe vows to adopt an “equal pay for equal work” scheme, forcing firms to pay the same wage for workers doing the same job.

Abe is counting on the plan – a centerpiece of a mid-year raft of policy announcements – to boost flagging consumption and win votes ahead of a July upper house election.

The move follows his decision to delay a scheduled sales tax hike by two-and-a-half years, putting his plans for fiscal reform on the back burner amid stubborn weakness in the economy.

But the plan could backfire on Japanese firms by pushing up labor costs and squeezing profits, analysts say. It also faces resistance from the businesses who would have to implement it.