Promoting Emergency Measures toward Recovery from the Earthquake
- Ninth Recommendation: The Impact of the Earthquake Disaster on Employment and the Vision for Job Security/Creation Going Forward (2) -

We offer our sincerest condolences to those affected by the massive earthquake and ensuing tsunami that struck northeast Japan on March 11. We extend our heartfelt prayers for a speedy recovery.

On March 15, 2011, Nomura Research Institute, Ltd. (NRI) launched the earthquake recovery assistance project team under the direct control of its president, Tadashi Shimamoto. Since March 30, it has announced recommendations and survey results about disaster recovery. For further information on the recommendations and results of research NRI group has released to date, see the following website: http://www.nri.co.jp/act311/index.html

The project now presents "Ninth Recommendation: The Impact of the Earthquake Disaster on Employment and the Vision for Job Security/Creation Going Forward (2)" to aid the recovery of the Tohoku region and the rebuilding of its industry. It is summarized as follows.

■Recommendations

This Recommendation is the sequel to "Recommendation 4: Effect of the disaster on employment and how to maintain and create jobs". Recommendation 4 raised concerns that people would be forced to relocate or change professions because the number of people employed in the hard-hit coastal districts of Tohoku (Iwate, Miyagi and Fukushima Prefectures) at the time of the disaster -773,000- would have dropped to 714,000 in one year and 678,000 after six years. It also suggested six industries that could provide good employment opportunities in the recovery and presented the employment situation.

Recommendation 9 presents employment recovery ideas by district, and more specific policies for maintaining and creating jobs for each of the six types of employment opportunity.

1) Employment recovery as seen by district

When looking at job recovery options in each district, we must understand that each region has its own commuting pattern, or "employment zone" (intra-prefecture in Iwate and Fukushima, inter-prefecture in Miyagi). Based on this, there is a need to work on protecting and creating jobs by reviving industries in a forward-looking, development-oriented way, based on the special features of local industries.

• Iwate Prefecture: "Selective rebuilding" of fishing industry based on the Sanriku coast, agriculture and related food processing industries
• Miyagi Prefecture: Revival of commerce, services and manufacturing based on partnership with Sendai, core city of the Tohoku region
• Fukushima Prefecture: Revival of manufacturing with a focus on the seven types of metallurgy and mechanics industries

2) Employment protection and creation policies by type of opportunity

Here we have gathered policy proposals to create and maintain jobs in this Recommendation by taking the six proposed employment opportunity types of Recommendation 4 and reformulating them according to the sequence of recovery as follows (Chart 1).

(1) Support for those keeping their jobs in affected areas

• a. Out of necessity to support the livelihoods of those in the community, "jobs that will be maintained" in spite of some restructuring of operations
• b. Employment in "self-restoring" industries part of the global supply chain that obtain support from customers
• c. Creation and maintenance of jobs through "selective rebuilding" of businesses that are strong enough to return to the market, even if they temporarily stopped operating or were unable to continue trading in certain areas
• d. Jobs created through "rebuilding by drastic efficiency measures", where companies strengthen their balance sheets by restructuring their finances and rebuilding the basis of their operations

(2) Creation of jobs through emergence of new industries as employment providers in the disaster-hit areas

• e. New jobs through innovative "creation of new industries"

(3) Support for maintaining jobs outside the disaster-affected areas

• f. Employment that requires workers to leave the region

During reconstruction, (1) it will first be necessary to provide support to those continuing to work in the disaster-hit areas. It will be vital to support local citizens to rebuild their livelihoods and to strive to maintain distribution infrastructure and lifelines in order to prevent the withdrawal of industries from the region that are able to recover independently. Moreover, in line with the characteristics of the four employment opportunity types, financial restructuring and economies of scale will be needed to rebuild the strength of industries.

Next, (2) new industries to serve as employment providers in disaster-hit areas will have to be targeted for tax breaks, subsidies and deregulation, by introducing one-country/two-systems special economic zone measures.

However, due to the overwhelmingly widespread effects of the March 11 disaster compared to any other in memory, we are concerned that a large number of people will leave the region due to unemployment as rebuilt and new industries fail to cover for the loss of employment. Therefore, the whole of Japan will need to step up by providing assistance in the form of jobseeker support, skills training and housing and (3) to protect employment outside the disaster zone.