Older Japanese must work longer without crowding out the young
The revised Law for the Stabilization of Employment of Elderly People, which requires companies to allow all employees to stay on the payroll until they are 65 if they wish to do so, takes effect on April 1.
The revised law comes in conjunction with a gradual increase in the eligibility age for benefits under the government-run kosei nenkin corporate pension insurance scheme to 65 from the current 60, beginning from April. The revision was enacted in August last year.
The purpose of the legislation is understandable: the need to help people deal with a period in which they might receive no pension. It can be said the times we live in require companies to continue employing all of their elderly workers as long as they desire to stay on at their jobs.
The current law calls for companies to make efforts to enable employees to work until the age of 65 after the retirement age of 60, either by abolishing the mandatory age limit, raising the age limit or implementing reemployment measures for retired workers.
When companies choose one of these reemployment systems, the current law is designed to enable the firm to set certain criteria in selecting employees eligible to continue working, such as health conditions and motivation for working.
Elderly can boost economy
The latest revision to the system is mainly aimed at doing away with the stipulation of criteria, to ban companies from retaining only certain selected workers.
Under the revised law, the government will issue a warning to companies that fail to comply with the new system. If they then refuse to comply, the companies' names will be made public.
To be sure, the nation's average life expectancy has risen markedly and the health of people in their 60s has improved a great deal.
It is significant that people aged 60 to 64, who have so far been supported by the pension system, will instead be able to support the social security system by working and paying premiums for the pension program.
It is hoped that people in this age bracket will receive higher income and also engage in higher spending, thus boosting the country's economic growth.
However, a wide divergence tends to appear among people in their 60s in terms of their willingness and ability to work.
It is reasonable that the business world at one time opposed mandatory continuation of employment up to the age of 65 on the grounds that the system would increase personnel costs, weighing on corporate management.
It is of the highest importance to ensure companies under the new system never deprive young people of employment opportunities for the sake of continued employment of the elderly. They also must never use the system as an excuse to increase the number of nonregular workers.
However, about 40 percent of employers responding to a poll said they will "curb employment of young recruits" following the implementation of the revised law.
'Age of lifelong work'
To prevent the dynamism of society as a whole from dwindling, all companies are urged to use ingenuity to provide jobs for both young and old.
Many firms will have to make important judgments regarding allocation of personnel expenses, such as curbing pay raises for employees in their 40s and 50s.
Meanwhile, the United States, Britain and Germany have already decided to raise their pension eligibility age to 67 or 68.
Given that Japan has been graying more rapidly than these countries, it will be hard for this nation to avoid further raising the pension eligibility age beyond 65.
Since the graying of society coupled with low birthrates will certainly be accelerated, people's working lives will most likely become longer. Under the circumstances, companies and workers alike must think hard about what should be done to prepare for the advent of an "age of lifelong work."
We urge the government to work out and implement policies conducive to expanding employment by giving more teeth to measures for encouraging the development of industries with high growth potential.
(From The Yomiuri Shimbun, March 29, 2013)