Japan Press Weekly

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2013 September 4 - 10 [LABOR]

Wages on downward trend under Abenomics policy

Akahta editorial (excerpts)

Results of the July monthly survey on working conditions released by the Labor Ministry showed that workers’ monthly regular income decreased 0.4% from the same month last year, marking the 14th straight month of decline. It is natural that a majority of people are unable to recognize the Abenomics policy as being effective for economic recovery.

Workers’ average annual income has fallen by 700,000 yen from its peak in 1997 while more and more people have been employed as non-regular workers such as part-timers and temps. As a result, the number of workers who earn less than two million yen a year has reached 10 million. The decrease in wages and the increase in workers with unstable jobs have aggravated people’s living conditions, which have worked as a major factor in putting the Japanese economy into the deflationary recession.

In order to keep labor costs low, large corporations when they make a profit offer higher seasonal bonuses to their employees instead of a basic pay raise. Toyota Motor, for example, offered a basic pay hike of 1,000 yen to its workers only three times between 2002 and 2013. With this method, large companies increased their internal reserves to more than 260 trillion yen.

Successive LDP-centric governments have also helped big businesses greatly increase their internal reserves by deregulating labor laws to promote replacement of full-time workers with contingent, low-paid workers. Prime Minister Abe Shinzo is claiming that once his economic growth strategy based on Abenomics policy contributes to an increase in companies’ profits, “workers will be able to earn more and get good jobs”. His argument is unrealistic.

The Abe’s growth strategy seeking to make Japan a nation with the world’s most business-friendly environment is useless to increase workers’ wages and improve the employment situation. The need now is to use a portion of the 260 trillion yen in corporate internal reserves for better wages and employment conditions.