February 9, 2011
Akahata carried a series of articles written by labor movement expert Oki Kazunori about the business circles’ strategy for the 2011 Spring Struggle, which was announced in a report published by the Japan Business Federation (Nippon Keidanren) Management/Labour Policy Committee. The following is Oki’s analysis of Keidanren’s refusal to accept any pay-raise demands by trade unions as expressed in the report:
In the 2011 Spring Struggle, the National Confederation of Trade Unions (Zenroren) and the People’s Spring Struggle Joint Committee call for workers’ wages to be raised by more than 100 yen an hour or more than 10,000 yen a month. The Japanese Trade Union Confederation (Rengo) demands a wage hike of 1%.
Considering workers’ living conditions and high profits made by major corporations, Rengo’s demand is too modest. Using just 3% of the internal reserves amassed, large firms can realize what the Joint Committee calls for. However, Keidanren rejected any form of wage hike.
In its report, Keidanren lists the following reasons for its refusal to raise workers’ salaries:
A company can increase workers’ wages only when: it has an ability to pay wages; its added value (i.e. business growth) is expected to continue to increase; it has and continues to have competitiveness that enables it to swiftly respond to a changing business environment; and its overseas competitors (like South Korean and Taiwanese companies) do not gain higher added value.
In other words, the report argues that there are hardly any firms capable of fulfilling all of these conditions, therefore a wage increase cannot be offered.
Absurd logic
If companies are allowed to set such conditions to deny a pay raise, no employer will increase workers’ salaries even after the economy recovers. I must point out that this argument reflects business circles’ cold hearted intention to set up a structure so they can avoid wage hikes indefinitely.
Keidanren’s report goes on to say that when it conducts a wage hike, a company needs to consider keeping balance with its group firms operating overseas and avoid a constant increase in labor costs. It also insists that funds for a pay raise should not be uniformly distributed but be used for human investment that promises future growth.
What it is saying is that raising wages for ordinary workers should be avoided as much as possible in order to compete with cheap labor markets overseas.
Huge funds amassed
This type of logic cannot hide the fact that large companies today have more than enough funds for increasing workers’ wages: their internal reserves of 257 trillion yen (FY 2009).
Keidanren’s report argues that business firms cannot use their internal reserves for a wage hike because the reserves are maintained as production equipment or stocks and companies need to keep funds for future investments in plant and equipment as well as in research and development.
However, they have shown no sign of using money for capital investment. In fact, major banks are agonizing over the deficiency in capital demands in the amount of 150 trillion yen.
Large corporations have enormous amount of money that they can use right away.
In the 2011 Spring Struggle, the National Confederation of Trade Unions (Zenroren) and the People’s Spring Struggle Joint Committee call for workers’ wages to be raised by more than 100 yen an hour or more than 10,000 yen a month. The Japanese Trade Union Confederation (Rengo) demands a wage hike of 1%.
Considering workers’ living conditions and high profits made by major corporations, Rengo’s demand is too modest. Using just 3% of the internal reserves amassed, large firms can realize what the Joint Committee calls for. However, Keidanren rejected any form of wage hike.
In its report, Keidanren lists the following reasons for its refusal to raise workers’ salaries:
A company can increase workers’ wages only when: it has an ability to pay wages; its added value (i.e. business growth) is expected to continue to increase; it has and continues to have competitiveness that enables it to swiftly respond to a changing business environment; and its overseas competitors (like South Korean and Taiwanese companies) do not gain higher added value.
In other words, the report argues that there are hardly any firms capable of fulfilling all of these conditions, therefore a wage increase cannot be offered.
Absurd logic
If companies are allowed to set such conditions to deny a pay raise, no employer will increase workers’ salaries even after the economy recovers. I must point out that this argument reflects business circles’ cold hearted intention to set up a structure so they can avoid wage hikes indefinitely.
Keidanren’s report goes on to say that when it conducts a wage hike, a company needs to consider keeping balance with its group firms operating overseas and avoid a constant increase in labor costs. It also insists that funds for a pay raise should not be uniformly distributed but be used for human investment that promises future growth.
What it is saying is that raising wages for ordinary workers should be avoided as much as possible in order to compete with cheap labor markets overseas.
Huge funds amassed
This type of logic cannot hide the fact that large companies today have more than enough funds for increasing workers’ wages: their internal reserves of 257 trillion yen (FY 2009).
Keidanren’s report argues that business firms cannot use their internal reserves for a wage hike because the reserves are maintained as production equipment or stocks and companies need to keep funds for future investments in plant and equipment as well as in research and development.
However, they have shown no sign of using money for capital investment. In fact, major banks are agonizing over the deficiency in capital demands in the amount of 150 trillion yen.
Large corporations have enormous amount of money that they can use right away.
