Japan Press Weekly

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2011 February 9 - 15 [ECONOMY]

Using 50 billion yen to invite Toyota, Miyagi still suffering from job shortage

For many local governments, hosting major manufacturers’ plant does not always promise new jobs for their residents.

Based on subsidies it received from the Miyagi Prefectural government, Toyota’s subsidiary, Central Motor Co., relocated its plant from Kanagawa Pref. to Ohira Village of Miyagi Prefecture and started operations on January 6 this year, with more than 1,500 workers producing compact cars for overseas markets.

The local government spent more than 50 billion yen to host the Central Motor’s plant. In addition to the subsidies directly given to the company, it used tax money to build an expressway and interchange, widen local roads, and develop public land for industrial use. These measures were taken to achieve its initial plan to create 10,000 new jobs in four years from FY 2010 by inviting private firms from outside the prefecture.

However, as of December last year, the Central Motor Co. hired only 17 local residents as full-time employees, including four college graduates and 10 high school graduates. Another 107 locally-hired workers are on three-month contracts. While the automaker also employed 128 temporary workers, it claims that it cannot determine whether or not they are residents of Miyagi since they were sent from staff agencies.

Yokota Yushi, a Japanese Communist Party representative in the Miyagi Prefectural Assembly, said, “Miyagi has the highest percentage of households that are in arrears with national health insurance premiums, the lowest standards for subsidizing medical expenses for infants, and the third-lowest employment rate of students graduating from high school this spring.”

“Inviting big companies to locate here with generous financial support does not necessarily lead to increasing local jobs. It is time for the prefectural government to put an end to the present policy and start directly improving welfare and other livelihood protection programs for residents,” Yokota stressed.