Large corporations increase internal reserves with personnel cuts

Twenty large corporations in Japan have saved 37-trillion yen of retained earnings while reducing the workforce by 20,000 in the past year.

This figure came out in a data book published by the Japanese Confederation of Trade Unions (Zenroren) on December 20.

Zenroren issues an annual data book at this time of every year to set a numerical target for a wage hike before spring's labor-management negotiations, and to utilize the book to help grasp working conditions.

The top three giants holding undistributed profits are Nippon Telegraph and Telephone Corporation (NTT) with 8.28 trillion yen followed by Toyota Motor Corporation with 7.94 trillion yen and Tokyo Electric Power Co., Inc. with 3.41 trillion yen. Rapid V-shaped recoveries are expected in all the top 20 business enterprises next year.

On the contrary, workers' net incomes have been negative for four consecutive years. The number of unemployed has exceeded 3.6 million. Living standards show a sharp decline. A series of budget cuts in the medical care and social welfare systems have dealt an additional blow to people's lives.

Zenroren's aim for next spring's collective bargaining: a 10,000 yen pay raise for regular workers and a 50 yen increase per hour for hourly employees.

Zenroren calculations show that if all the major 20 corporations give increases of 10,000 yen to all their employees, the amount will be 315.7 billion yen or only 0.9 percent a year out of their retained earnings. The consumption ratio is 60.8 percent on average out of real income. So based on this rate, consumer spending will bring a positive effect of 287.7 billion yen to the Japanese economy.

To expand consumer spending is one of the essential factors in revitalizing the country's economy. To this end, Zenroren will call for a 10,000 yen wage increase. (end)