Prime Minister Sanae Takaichi on Wednesday instructed relevant ministers to accelerate efforts to review systems related to working hours, including the discretionary labor system.

The instruction was given during a meeting of the Japan Growth Strategy Council, where labor market reform to strengthen the economy was discussed.

The government also set the goal of raising the country¡¯s faltering labor productivity by 15% over five years. Japan¡¯s annual labor productivity growth has remained at around 0% in inflation-adjusted real terms in recent years. The government hopes to increase productivity growth through human capital investment and labor market reform.

¡°Human resources are important in terms of enhancing the country¡¯s comprehensive national power,¡± Takaichi said.

She spurred discussions on the discretionary labor system, focusing on measures to prevent the system from being used improperly, so that people who want to increase their working hours can do so flexibly.

The discretionary labor system can apply to specified jobs based on a labor-management agreement. Under the system, wages are paid for predetermined working hours, not for actual hours worked.

At the Wednesday meeting, the government also confirmed its plan to strengthen support for smaller companies adopting what are called?Article 36 agreements between labor and management to relax overtime restrictions.

The government plans to consider viable measures to reform working hour-related systems and summarize progress this summer.

Participants also discussed measures to support human resources development in 17 priority areas for public-private investments, including artificial intelligence and semiconductors.

The government aims to increase human capital investments by companies from an average of ?19,000 per person in fiscal 2024 to ?22,000 in fiscal 2029.

Regarding labor mobility, the government hopes to boost the percentage of workers who earn higher wages after changing jobs from 40.5% in 2024 to 42.3% in 2029.

Additionally, the government will aim to raise the rate of women who keep their jobs before and after giving birth to their first child from about 70% in 2021 to 80% by 2030.

To reduce the burden of housework, a priority for the prime minister, the government plans to create a national certification program for housework support services and hold the first certification test around autumn 2027.

The council also confirmed a plan to facilitate moves to pass on higher costs to products and services linked to public-sector demand, in order to support wage increases at smaller firms.