Urgent discussions needed to secure funds for employment insurance

Editorial

15:50 JST, January 28, 2022

The employment insurance program is a safety net to protect the livelihoods of workers. Discussions must be deepened on how to secure financial resources to properly fulfill this role.

The Health, Labor and Welfare Ministry’s Labor Policy Council has compiled a report on securing financial resources for the employment insurance program. Based on this report, the government plans to submit bills to revise the Employment Insurance Law and other legislation to the current Diet session.

One main pillar of employment insurance is the employment stabilization program, which provides, among other services, the employment adjustment subsidy. Another pillar is the unemployment relief program, which pays unemployment benefits. The employment stabilization program is funded by premiums paid by employers while the unemployment relief program is financed by premiums equally shared by employees and employers as well as the government share of contributions.

The report calls for raising the premium rate for the employment insurance program, for which combined payments by employees and employers currently stand at 0.9% of wages, to 1.35% in the next fiscal year.

This is because the employment adjustment subsidy, which partly covers leave allowances, has topped a total of ¥5 trillion since 2020 due to the novel coronavirus pandemic, causing insurance finances to deteriorate.

As an emergency measure, a loan was extended from the unemployment benefit reserve fund, but this fund, which used to amount to ¥6 trillion, has sharply fallen to ¥1.3 trillion.

If this goes on, the payment of not only the subsidy but also the unemployment benefits could run into trouble. Raising insurance premiums is reasonable. It is hoped that the understanding of companies and workers, who would see a greater burden, will be carefully sought.

The report proposed that the premium hike be implemented in two stages — in April and October. In addition to taking into consideration the coronavirus crisis, this seems to be aimed at postponing part of the increase in the burden until after the House of Councillors election in summer.

The injection of funds from the general account and the government share of contributions will also be points of contention.

A special law allowing the transfer of funds from the general account is to expire at the end of this fiscal year.

The report called for an extension of the special law and proposed the introduction of a system that would allow funds from the general account to be injected in case of emergency. It is hoped that more wisdom will be applied as to how financial resources can be swiftly secured.

The government is supposed to cover 25% of unemployment benefits. However, since the employment situation remained steady until the coronavirus outbreak, the government share of contributions has been kept at 2.5%, or one-tenth of that level.

Raising the government share of contributions requires in-depth discussions from the viewpoint of how the government should fulfill its responsibility for taking measures against unemployment.

For non-regular workers who are not covered by the employment insurance program, there is a system in which they take up job training while receiving a monthly benefit of ¥100,000. However, it is regrettable that the system is not widely used, partly due to not being well-known.

It is hoped that the government will devise ways to provide support to a wide range of workers.

— The original Japanese article appeared in The Yomiuri Shimbun on Jan. 28, 2022.