Large corporations rake in more profits while workers earn less

   Government surveys published on September 27 show that large corporations’ current profits have increased by 75 percent from the economic bubble years in the 1900s while the average salaries of company workers have decreased for nine consecutive years.

   The Finance Ministry found that corporations capitalized at one billion yen or more made profits of about 32.8 trillion yen in FY 2006, up about 75 percent from FY 1990 during the economic bubble.

   In contrast, salary per employee in large enterprises decreased by 56 percent from the previous year to about six million yen, slightly up about eight percent from the 1990s.

   The total amount of dividends distributed was about 12 trillion yen, an increase of 39.4 percent over the previous year, up 417 percent from the 1990s.

   Clearly, large corporations are returning a portion of the record high profits to their shareholders in the form of dividends.

   Shareholders currently enjoy preferential tax breaks on profits from securities, and thus increasing dividends and reduced salaries are causing a reduction in the country’s revenues from income tax.

   Tax burdens on large companies have been reduced since FY 1990, including corporate taxes, corporate inhabitant taxes, and corporate enterprise taxes,. Despite a sharp increase in current profits, their tax burdens were reduced by only one percent from the 1990s.

   If the corporate tax alone were returned to the 1990s level, about four trillion yen would be secured as tax revenues.

   The National Tax Agency’s survey shows that average salaries in 2006 per employee in the private sector were 4.35 million yen, down 19,000 yen from the previous year, a decrease for the ninth straight year.

   Meanwhile, the total amount of income tax these employees paid in 2006 was about ten trillion yen, up 9.9 percent from the previous year.

   Workers are suffering from continuous cuts in their salaries in addition to continuous increases in income taxes.

   The survey also shows that 38.8 percent of salaried workers were paid less than three million yen a year and that eight percent earned less than one million yen, indicating an increase in the percentage of low income earners.

- Akahata, September 28, 2007