Japan Press Weekly

Tweet

2019 November 6 - 12 [LABOR]

Large corporations record highest profits by refusing to pay better wages to workers

Government statistics show that large corporations’ ordinary profits have been breaking previous records while workers’ wages continue to stagnate. Big businesses are hoarding a huge amount of internal reserves and using this money for financial and overseas investments.

The Finance Ministry’s survey of corporations indicates that the ordinary profits of large corporations with a capital of one billion yen or more grew 61% between 2012 and 2018. During the same period, salaries of workers in those companies increased only by 4% and internal reserves went up by 35%.

Large companies are seeking to earn financial gains without contributing to the economy by paying higher wages to workers.

At the same time, the widening wage gap between large and smaller companies has become serious. In the Labor Ministry’s statistical data regarding wages, in large corporations with a workforce of more than 1,000, workers aged 50 to 55 earn 506,600 yen per month on average while workers in the same age bracket in middle-sized companies (workforce of 100-999) and in small-sized companies (10-99) are paid 396,600 yen and 337,500 yen, respectively.

Large corporations use their dominant position to pressure their subcontractors, which are usually smaller in size, to accept lower unit prices and other unfair trading conditions. This leads to small- and medium-sized enterprises’ difficulty in paying higher wages to their workers.

Personal consumption makes up 60% of Japan’s GDP and around 70% of workers are employed by SMEs. The best way to vitalize the economy is to push large corporations to use their internal reserves to pay better wages to their employees and offer better prices to subcontractors.

Past related article:
> Workers’ hourly earnings decrease in Japan over last 20 yrs. unlike other major countries [May 18, 2019]