September 3 and 4, 2015
Workers’ real wages fell in fiscal 2014 while the amount of large corporations’ internal reserves reached a record high, a government survey shows. The Abe government’s economic policy has benefited large corporations and stockholders but not workers.
According to the survey results on corporations’ financial health that the Finance Ministry released on September 1, the amount of internal reserves held by corporations with a capital of more than one billion yen marked an all-time high of 299.5 trillion yen in 2014, up by 14.4 trillion yen from the previous year. Since Prime Minister Abe Shinzo took office in 2012, these companies added 27.4 trillion yen to their internal reserves. The amount in ordinary profits and dividends to stockholders also reached the highest ever figures.
Large corporations selling their products abroad made a huge profit thanks to the depreciation of the yen induced by the “Abenomics” economic policy. Toyota Motor, for example, increased its earned surplus, a main part of internal reserves, by 1.5 trillion yen to 15.6 trillion yen last year. The automobile giant obtained 88.1 billion yen of profit from changes in exchange rates, up by 37.8 billion yen from the previous year.
The Abe government’s policy to provide tax cuts for corporations also helped large businesses to increase their internal reserves. The Finance Ministry’s survey revealed that the ratio of corporate taxes paid to income before taxes hit a record-low of 24.1%.
In contrast, workers’ annual income increased by only 1% from a year earlier. The consumption tax rate went up from 5% to 8% and consumer prices rose in 2014 while workers’ real wages went down.
Past related article:
> Large companies’ internal reserves reach all-time high [December 29, 2014]
According to the survey results on corporations’ financial health that the Finance Ministry released on September 1, the amount of internal reserves held by corporations with a capital of more than one billion yen marked an all-time high of 299.5 trillion yen in 2014, up by 14.4 trillion yen from the previous year. Since Prime Minister Abe Shinzo took office in 2012, these companies added 27.4 trillion yen to their internal reserves. The amount in ordinary profits and dividends to stockholders also reached the highest ever figures.
Large corporations selling their products abroad made a huge profit thanks to the depreciation of the yen induced by the “Abenomics” economic policy. Toyota Motor, for example, increased its earned surplus, a main part of internal reserves, by 1.5 trillion yen to 15.6 trillion yen last year. The automobile giant obtained 88.1 billion yen of profit from changes in exchange rates, up by 37.8 billion yen from the previous year.
The Abe government’s policy to provide tax cuts for corporations also helped large businesses to increase their internal reserves. The Finance Ministry’s survey revealed that the ratio of corporate taxes paid to income before taxes hit a record-low of 24.1%.
In contrast, workers’ annual income increased by only 1% from a year earlier. The consumption tax rate went up from 5% to 8% and consumer prices rose in 2014 while workers’ real wages went down.
Past related article:
> Large companies’ internal reserves reach all-time high [December 29, 2014]
