Japan Press Weekly

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2021 October 20 - 26 [POLITICS]

LDP-Komei gov’t increases use of non-regular workers which depresses wages

The Internal Affairs Ministry recently released the labor force survey results showing that in 2019, the number of non-regular workers reached 21.65 million, hitting a record high. A major factor for this is labor law deregulation promoted by the Liberal Democratic-Komei coalition government.

A typical example is the adverse revision of the law on the use of temporary workers. With the law revisions in 1999 and in 2003, the use of temp workers was liberalized in principle and then expanded to the manufacturing industry. The 2015 revision under the Abe government allowed companies to use staffing services on regular jobs without restrictions.

The LDP boasted that ex-Prime Minister Abe’s economic policies dubbed “Abenomics” contributed to an increase in employment. However, in reality, it was mostly increases in non-regular employment. Since the Abe administration inaugurated in 2012, the ratio of non-regular workers to the nation’s total workforce has reached the 35-38% level. The majority of non-regular workers are women and the elderly.

Furthermore, the LDP-Komei government has brought about wage stagnation.

In the Labor Ministry data, the annual wage earnings per worker in 2020 decreased by 220,000 yen from the 2012 level. The OECD data shows that in 2020, the average wage in Japan stood at 38,524 dollars (or about 4.39 million yen at the exchange rate of 114 yen to the dollar), the lowest among G7 countries.

The Abenomics economic policies, under the slogan of “making Japan the most business-friendly country in the world”, encouraged deregulation and corporate tax breaks, which only benefited a handful of large corporations and the ultrarich.

In 2020, internal reserves amassed by large corporations with a capital of one billion yen or more totaled an all-time high of 466.8 trillion yen. Under the nine years of Abenomics, the amount of dividends paid to shareholders increased by 1.83 times.

Prime Minister Kishida Fumio claims that he will realize a more equitable cycle of growth and distribution. If he really seeks to achieve this, he should take actions that enable non-regular workers to obtain regular positions, provide equal treatment to non-regular workers, raise the national minimum hourly wage to 1,500 yen in combination with support for smaller businesses.