Employers are using 2002 Spring Struggle as chance to cut wages -- Akahata editorial, March 2

The 2002 Spring Struggle, in which workers are demanding higher wages and job security, will reach its peak in mid-March.

The business circles and large corporations are trying to use the economic recession as a pretext for rejecting the workers' call for pay raises as "irrelevant" and for offering wage cuts and a review of the regular base wage increase system.

Wage cuts taking place

Major corporations are carrying out this policy. In iron and steel and electronic industries, employers are proposing 10 to 30 percent wage cuts and an end to the system of regular base wage increases. Canon Inc. is proposing a 50 percent reduction in the annual base wage increase.

There are new corporate moves toward using a work-sharing system as a pretext for cutting wages. Sanyo Electric, for example, is proposing a wage cut by up to 20 percent.

While calling for defense of employment to be given top priority, the Japan Federation of Employers' Associations (Nikkeiren) is pursuing worker dismissals and wage cuts as much as they like. A Nippon Steel Corporation executive director was quoted by Nikkei Shimbun (February 13) as saying, "Giving up pay raises doesn't justify a call that all jobs should be maintained."

The employers are thinking that they don't care if the livelihood of workers worsen in the already critical situation over jobs and living conditions as long as corporate profit increases. It is intolerable for corporations to abandon their social responsibility.

The argument which business circles and large corporations use to counter the Spring Struggle is unreasonable and groundless.

Major electronics corporations stress that they are in the red. The fact, however, is that they enter costs in advance for restructuring as losses so that they can achieve a V-shape recovery in the business record in the next term (Nikkei, February 25). This is no crisis for corporations. Their aim is to ensure larger profits as a consequence of restructuring.

Internal reserves of ten electronics corporations combined will amount to 18.8 trillion yen (140 billion dollars). They have undeniably accumulated their profits.

Nikkeiren's argument that Japanese workers are so highly paid to the extent of harming international competitiveness is false.

If Japan's personnel cost per hour is based at 100, the United States will be 116 and Germany 119; If compared in purchasing power parity of what wages can buy, the United States is 143 and Germany 173, far higher than Japan.

Far from falling, Japan's international competitiveness in the manufacturing industry ranks second in the world in a survey by the Japan Productivity Center sponsored by business circles. In real labor productivity, Japan is the world's highest.

What will be the consequences of wage cuts and corporate restructuring carried out on the pretext of strengthening competitiveness? Think tank Daiwa Soken estimates that 310 large corporations alone will reduce 1 trillion yen (8 billion dollars) in personnel cost in two years.

While corporations are cutting personnel costs, disposable income of a working household declined by 390,000 yen (2,900 dollars) a year, and its consumption expenditure fell by 270,000 yen (2,000 dollars).

Such an extraordinary situation caused a spiral decline of income, consumption, and production, which has become a major cause of Japan's economic crisis.

Nikkeiren in its 2002 labor study report acknowledges that the price fall and deflation have arisen from the excess of supply and underconsumption. The major economic recession is mainly caused by reduced consumption.

People's livelihood claims priority

No recovery is possible for the Japanese economy in which personal consumption accounts for 60 percent of the gross domestic product (GDP) without the recovery of personal consumption.

The way to get out of the major economic recession is to stop wage cuts and corporate restructuring, and to invigorate the people's livelihoods through wage increase for workers and by increasing jobs.
The development of the 2002 Spring Struggle to confront the business circles' strategy and the Koizumi "reform" of bullying the people has a national cause in defense of livelihood, jobs, and for economic recovery. (end)