Keidanren must recognize responsibility to resolve economic crisis

Japan Press Weekly

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

Keidanren must recognize responsibility to resolve economic crisis - Akahata editorial

The Japan Business Federation’s (Nippon Keidanren) Committee on Management and Labor Policy published a report outlining its policy on how to deal with labor’s wage increase demands in this year’s Spring Struggle. Although the theme of the latest annual report is “To overcome the crisis and pave the way for a new development,” it fails to propose appropriate ways to do so.

Turn its back on social demands

The ongoing economic crisis in Japan has been mainly caused by wage cuts and unstable employment measures that collapsed the basis of people’s living conditions and discouraged consumption. The demand for measures to be taken to increase wages and improve the employment situation in order to change the economy from one of depending on exports to one led by domestic demand is now widely shared. This year’s Spring Struggle should be an opportunity to move along this course.

The Keidanren report completely turns its back on the public demand. Its main proposal is to continue depending on exports to Asian developing nations. Stating the need for corporations to control labor costs, it sets forth the argument that it is difficult for employers to increase workers’ wages, provide them with bonuses, or conduct annual pay raises for them.

The report contains a section entitled, “Activities for stability and job creation,” reflecting Keidanren’s concerns about the public criticism over major corporations’ dismissals of temporary workers and other lawless labor practices. However, in citing excuses it says that it has contributed to reducing the scale of an “avalanche” effect by making efforts to offer job opportunities by using the government’s employment adjustment subsidy system, and only calls for improvements in government measures, including one to expand employment insurance coverage.

As reasons for the increase in the number of non-regular workers, the report puts attention on the growth in the service industry and workers changing their minds. It asserts that in order to continue to be internationally competitive, corporations had no choice but to use non-regular workers. The report does not show any willingness to meet the public call for a job creation system centered on regular employment, claiming that it is not constructive to argue about the increase in non-regular employment.

Large corporations have the wherewithal to use a part of their internal reserves to benefit the general public. Their reserves have doubled to 400 trillion yen in the last ten years. In contrast, workers’ wages in 2009 decreased by 27 trillion yen compared to the 1997 level. In order to ensure stable economic growth, it is necessary for large corporations to utilize a portion of their huge amount of internal reserves to increase wages, create jobs, and improve social welfare services. The Keidanren report, however, argues that internal reserves are only an “item of accounting” and are not available cash, and thus not available to use. They seem to be incapable of understanding what corporate social responsibilities entail.

Time to stand up

The government in its 2009 White Paper on Labor and Economy points out that there was a tendency for corporate profits to be used to further increase internal reserves and dividends, and not be used for an increase in the payment of wages to workers. The White Paper argues that the main obstacle to expansion of domestic demand is large corporations forcing wage cuts and continuing to use low-wage temporary workers.

It will be impossible to overcome the crisis as long as they refuse to increase wages and ensure job security. The nationwide joint struggle to force large corporations to fulfill their social responsibilities is an important task to accomplish in order to realize a domestic demand-led economy.

- Akahata, January 21, 2010