Corporate internal reserves doubled in 10 years

Japan Press Weekly

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

Corporate internal reserves doubled in 10 years

In the last 10 years, companies’ internal reserves have doubled and reached 428.6 trillion yen, a labor think tank found in its research.

The research result was included in an urgent proposal for breaking through the economic crisis published on November 18 by the Japan Research of Labor Movement (Rodo-soken). The proposal stresses the need to release corporate internal funds that were reserved with the sacrifice of workers and small- and medium-sized firms in order to strengthen domestic demand.

Corporate internal reserves have rapidly increased since 1999, when the restrictions on the use of temporary workers were removed. In FY2008, internal reserves increased by 218.7 trillion yen from 209.9 trillion yen in FY 1999. 69.3 percent of 218.7 trillion yen were reserved by companies with more than 100 million yen in capital.

If using just 2.7 percent of the increase of 218.7 trillion yen, the minimum hourly wage can be raised to 1,000 yen. With 3.5 percent, all non-regular workers can be given a regular position. These measures will help to expand domestic demand.

Rodo-soken co-president Makino Tomio pointed out that the enormous amount of corporate internal reserves have weakened domestic demand and helped cause Japan’s economic crisis, which is more severe than in other countries. He stressed that the corporate funds must immediately be returned to the workers and the society.

- Akahata, November 19, 2009