Japan Press Weekly

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2021 November 17 - 23 [LABOR]

Drastic gov’t measures needed to shift away from wage slump

Akahata editorial (excerpts)

Among major economic powers, Japan is the only country where wages have been in a slump during recent decades, according to the OECD data.

When the hourly earnings level in 1997 is defined as 100, that of Japan in 2020 fell to 90, compared with 194 for the U.K., 192 for the U.S., 175 for France, 163 for Germany, and 270 for South Korea.

This was attributed mainly to the business circles’ policies. Claiming that Japanese workers’ wage level should be the same as that in other Asian countries, corporate executives in Japan restrained wage increases. In addition, they pushed forward with job-cut plans and the replacement of regular workers with non-regular workers.

In contrast to falling wages, large corporations have been increasing their profits. Listed companies in the April-September quarter 2021 achieved record-breaking profits. Internal reserves of corporations capitalized at one billion yen or more increased to an all-time high of 466.8 trillion yen in FY 2020.

In order to protect people’s livelihoods and strengthen the nation’s economy, it is necessary to increase wages and secure stable employment. The use of just a portion of the internal reserves amassed by large corporations will not only realize an appropriate wage increase and the conversion of non-regular workers into regular workers, but also create more decent job opportunities. Regulations prohibiting large corporations from forcing their subcontractors to accept cuts in unit prices will produce conditions which enable subcontractors and other small suppliers to offer higher wages to their employees.

The improvement of working conditions of non-regular workers and essential workers such as healthcare and welfare professionals is a pressing task. In Japan, the ratio of non-regular workers to the total workforce has reached 41%.

The results of a recent survey by the Japan Institute for Labour Policy and Training shows that workers whose wage level is barely above the minimum wage made up 22.7% of workers in the wholesale and retail sector, 39.9% in the accommodation and food service sector, and 6.6% in the healthcare and welfare sector.

An increase in the minimum wage will contribute to raising the nation’s basic wage rate. The need is to increase the minimum wage, which is 930 yen on average this year, to 1,500 yen and to establish a nationwide, across-the-board minimum wage system.

The reason behind the falling wages is that permanent employees have increasingly been replaced with non-permanent ones. The establishment of decent work rules, including revising the Worker Dispatch Law and introducing equal treatment measures at workplaces, will increase the number of full-time positions and pave the way toward a society which ensures workers received adequate wages.