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Labor reforms? Japan limits on part-timers please no one.

In Japan, labor reforms approved last Friday to protect temporary workers – now about one-third of the workforce – were met with criticism on both sides. Firms say they need a flexible workforce, while laborers say too many loopholes remain.

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Firms took on more part-time workers, dispatch labor, migrant labor from depressed regions like the northern island of Hokkaido, and foreign labor, especially Brazilians of Japanese descent and low-paid Chinese "trainees."

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In 1999, 26 specialized sectors were allowed to hire dispatch labor, he said, and in 2004, dispatch work was allowed in manufacturing firms. Dispatch labor boomed, peaking at 2.2 million in 2007, only to plunge during the global recession as firms shed workers.

Mr. Iguchi called such dispatch labor a "just-in-time" workforce, complementing the famous "just-in-time" manufacturing model of Japan's corporate titans like Toyota. Workers are hired only when needed, and cut when orders are slack.

Such an arrangement has helped Japanese firms control costs. But it provides little security for workers, who are paid less and receive fewer benefits than permanent, directly hired employees.

Skeptical workers

At a union office in Japan's manufacturing heartland, one tousle-haired former dispatch worker, who did not want his name used, told a typical tale.

He worked for 6-1/2 years as a dispatch worker for Mitsubishi Electronics in Aichi Prefecture. He clocked 60-hour weeks and had the same responsibilities as permanent workers. But he earned less than half of what they made, only 1,120 yen (about $12.40) per hour.

Mitsubishi sometimes gave two or three dispatch workers permanent jobs, giving hope to the rest. "Me and my co-workers thought, maybe one day we'll be taken on, too," he says.

Instead, in December 2008 he and 40 other dispatch workers in his unit were summoned by Mitsubishi bosses and fired, with a week's notice. The recession had hit with full force and they were no longer needed; the unit's 20 permanent employees would stay on.

Now, he's supporting his wife and child with a job training allowance provided by the government, which he can receive for six months.

He and two other former dispatch workers have taken legal action against Mitsubishi. They're asking for 6 million yen ($66,000) each in compensation. They argue that under labor regulations, Mitsubishi was required to offer permanent employment after three years of work. Mitsubishi Electric declined comment, saying the case was still in litigation.

The worker says the DPJ's reforms don't go far enough. "They're no good," he says flatly. "People will still be able to be fired easily, and in practice nothing will change for workers like me."

The wrong solution?

Chie Matsumoto, a Tokyo-based labor rights activist, agrees. "There are other temporary employment systems in Japan that would still leave working conditions unstable," she says.

Iguchi, the labor economist, says firms will simply turn to other avenues of hiring nonpermanent workers. He says that improving unemployment benefits would have more impact.

The government should also enforce equal pay for equal work, he says, to close the wage gap between regular and "irregular" workers. He cites research showing that a full-time male worker in Japan typically makes more than three times what a part-time female worker makes for the same work.

"The idea that if you ban dispatch labor you'll have no 'working poor' – it's an illusion," he says.

Saichi Kurematsu, chairperson of the Aichi Prefectural Federation of Trade Unions, says some of the new measures were welcome, such as banning one-day contracts.

But he says 70 percent of the dispatch workers fired during the recent recession were on monthly contracts, not daily ones. He called for better unemployment benefits, and said companies should be required to offer permanent employment to any temps who work for them for longer than a year.

"During the Koizumi government, the liberalization of labor rules created a very difficult situation for workers," says Mr. Kurematsu. "We were very happy to see that administration thrown out. But after six months [of DPJ-led government], we're less happy."

"We think the reforms are insufficient," he says. "They don't deal with the real problems."