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Japan Press Service Co., Ltd. is the only news agency providing information of progressive, democratic movements in Japan

Unsubstantiated government view on economic 'recovery'
Akahata editorial

Bank of Japan Governor Fukui Toshihiko in his speech to BOJ branch managers on October 20 stressed that the economy is "pulling out of stagnation and is continuing to recover." Economic and Fiscal Minister Takenaka Heizo commented that improvement in business performance is being felt by household economies.

However, the general public feels the opposite effect on their living conditions. A Health, Labor and Welfare Ministry survey found that 55.8 percent of responding households say that they are worse off, the highest percentage than ever.

Has job market recovered?

The difference between the government and BOJ assessment of the economy and the way the public feels comes from the fact that the former fails to look at actual living conditions and the actual job market. It is true that large corporations are showing good business results, but what matters to the household economy is the availability of jobs and decent wages.

The government argues that the number of jobs has increased. But this is true only when it is compared to the time when the number of employees hit bottom due to the rapid increase in unemployment and business failures caused by the Koizumi Cabinet's "structural reform" policy. A Public Management Ministry survey shows that the number of employees (excluding executives) , which was 49.99 million before the Koizumi Cabinet took office, was 50.1 million on average for April-June 2005. Thus, the Koizumi Cabinet has not increased the number of jobs.

On the other hand, the terms and conditions of employment have worsened for workers. Full-time jobs decreased by 2.46 million, while part-time, temporary, or other non-regular jobs increased by 2.47 million. The ratio of non-regular workers to all workers has reached 30 percent. Remember that wages for part-time workers are at best 50 percent of that of regular workers. This gap between regular and non-regular workers in Japan is in stark contrast with Europe where regular and non-regular workers are treated equally.

The Koizumi Cabinet has eased government regulations on employment to meet the business circles' call for cuts in personnel costs by replacing regular workers with non-regular ones. At the Council on Economic and Fiscal Policy meeting four years ago, held when the number of the jobless was on the increase, Ushio Jiro, Japan Association of Corporate Executives (Keizai Doyukai) special advisor, stated as follows:

"Wages will go down as new forms of employment are adopted by introducing short-term employment contracts and using more temporary workers through deregulation of the worker staffing system and fixed term contracts.

With these policies resulting in an increase in unstable jobs and wages cut, employees' total income now is 12 trillion yen less than that of the year of the Koizumi Cabinet's inauguration, though the number of employees remains at the same level.

The government's monthly economic report for October shows that regular monthly payments of salaries are on the increase, and extra payments, including seasonal bonuses, exceeded last year's.

However, regular salaries have increased only slightly from the bottom, and they are still 3 or 4 percent below the 2000 level. The summer bonus increased a several percentage points from last year, but it must be noted that summer bonuses overall decreased nearly ten percent during the three years since the cabinet's establishment. Therefore, this year's increase was "just a drop in the bucket."

Economic papers have reported that listed companies' break-even ratio was 82.9 percent, the lowest in the past 25 years due to reduced personnel and fixed costs. Now major companies can secure their profits even if their sales fell about 20 percent.

This suggests that major companies are making even larger profits by shifting greater burdens onto the public. It is natural for the public to have feelings that are opposite to those of major companies enjoying increasing profits.

Reverse money flow

A Cabinet Office survey has found that 70 percent of listed companies think it will take more than two years to complete their corporate restructuring, up ten percentage points from 1999. The Koizumi Cabinet with its "structural reform" is planning to increase income tax and consumption tax rates and cut corporate tax rates.

Business circles and the Koizumi Cabinet are now trying to take money from households to benefit major companies. Only by reversing this money flow will it be possible to put Japan's economy on a true recovery track. -- Akahata, October 24, 2005