Japan Press Weekly

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2012 January 18 - 24 [LABOR]

Only 4% utilization of corporate internal reserves will create 4.66 million new jobs

The Japan Research Institute of Labor Movement (Rodo-soken) on January 19 released data showing that the use of only 3.94% in corporate internal reserves would lead to the creation of 4,661,000 new jobs and an increase of more than 2 trillion yen in tax revenues.

The Rodo-soken sees the use of just a portion of huge amount of amassed corporate profits as an extremely effective measure to overcome Japan’s economic crisis.

The institute anticipates that various labor unions will put this data to use when they negotiate with management for a wage hike and better working conditions in their annual spring struggle.

The institute calculated the following economic effects from such a measure: overtime work without pay would be eradicated; workers would take all their annual paid holidays and all their legally secured leave time; the 5-day work week system would be fully implemented; and a 10,000 yen increase in monthly wages for full-time workers and a 100 yen increase yen in hourly wages for part timers could be implemented.

As a result of the economic effects, 4,661,000 new jobs would be created. In addition, the job creation would create about 18.14 trillion yen in salaries, about 19.69 trillion yen in domestic production, and about 2.01 trillion yen in national and local tax revenues.

In order to achieve these results, corporations would only need to use 3.94% of internal reserves, which reached to 460.9 trillion yen in FY 2010.

Applying the same measure to large corporations alone (with a capital of more than 1 billion yen), the rate would be 6.8% of their funds of 266 trillion yen.

The Rodo-soken argues that if such a measure were implemented, the resultant wage hike and dramatic improvement in working conditions would make it possible to overcome the super-strong yen and the deflation-led recession.