The average monthly total cash earnings per regular employee in Japan rose by a preliminary 0.8% year-over-year to Y275,637 in March, posting the first y/y rise in 22 months, data from the Ministry of Health, Labor and Welfare released on Friday showed.
It followed a 0.6% fall in February, when the pace of the y/y drop accelerated from -0.2% in January, because the delayed year-end bonus payment included in the January data fell out of the calculation in February.
March’s rise in the average wage was the first since +0.2% in May 2008.
The latest data also showed other improvement in the wage situation: overtime pay rose for the third month in a row, pushing up overall compensation, although the “base wage” — the key indicator for a recovery — still showed a slight drop from the year-earlier level.
Another indicator of a gradual improvement in the labor market was the number of regular employees, which posted the second straight year-on-year rise in March after showing the first gain in 10 months in February.
Overtime pay in March surged 11.7% year-on-year after +8.1% in February, aided by a jump in overtime hours worked at factories (payback for the plunge in early 2009). January’s 2.4% gain in overtime pay was the first y/y gain in 18 months.
Overtime hours worked and overtime pay hit bottom in March last year, which means they will show year-on-year growth for the next several months.
In inflation adjusted terms, the average total wage rose a preliminary 2.1% y/y in March after rising 0.6% in February.
This was the third straight y/y gain, with real wages improving gradually from the record drop of 5.2% posted in June last year.
Overtime hours worked in the manufacturing sector posted the fourth straight year-on-year rise in March, surging by another record increase of 56.1%, surpassing the previous record growth of 54.6% hit in February 2010 and recovering steadily from the record drop of 48.9% in March 2009.
Moreover, overtime hours at factories rose 0.8% month-on-month on a seasonally adjusted basis, showing the 12th straight m/m gain.
Overtime hours have been recovering fast since October 2009, led by the automobile and electronics sectors. This has pushed up the level of overtime pay.
Total overtime hours worked for all industries rose by a fresh record of +13.3% y/y in March, topping the previous record gain of +11.4% marked in the previous month. January’s +4.4% was the first year-on-year rise in 18 months.
Total hours worked for all industries continued to improve in March, up by 3.2%, after rising 0.6% in February. The 0.4% rise in January was the first y/y gain in 18 months.
Three years of steady job creation until April 2009 were replaced by job losses or flat employment levels through the end of last year, but the latest data indicate a recovery in the labor market.
The number of regular workers rose by 0.2% in March after rising at the same pace in February. The gain in February was the first y/y gain in 10 months since +0.3% in April 2009.
Cash earnings include overtime and bonuses. Regular employees are workers on permanent payrolls as well as those with part-time status.
Average “base” salaries, or scheduled cash earnings, at surveyed companies that employ five or more people fell 0.2% y/y in March vs. -1.0% in February, posting the 20th straight y/y drop, but the pace of decline has decelerated gradually.
Bonus and other special cash earnings, which tend to fluctuate sharply, rose 11.2% y/y in March vs. -26.1% in February.
Month: April 2010
Japan Spending, Wages Rise as Prices Slump 13th Month
Japan’s household spending, wages and job openings increased, while consumer prices tumbled for a 13th straight month, signaling a sustained recovery that’s still not strong enough to end deflation.
Wages advanced 0.8 percent, the first increase in 22 months, the Labor Ministry said.
Finance Minister Naoto Kan said today that the central bank may forecast deflation will end next fiscal year by predicting consumer prices will either increase or be unchanged. Currently the board sees a 0.2 percent decline for the year ending March 2012 and a 0.5 percent drop in the current year.
Kan last week last week called for price gains of as much as 2 percent. The ruling Democratic Party of Japan this month said it may include an inflation target in its platform for a July upper house election.
The BOJ will face “mounting pressure as the election approaches,” said Hiroaki Muto, a senior economist at Sumitomo Mitsui Asset Management Co. in Tokyo. “For politicians, it’s easy to blame the central bank for lingering deflation and stagnant economic growth, and by doing that they can show the public they’re taking some action.”
All shuttered Geos schools to reopen for lessons in May
G.communication Co., which has taken over collapsed English conversation school operator Geos Corp., plans to resume lessons at all Geos schools by the end of May, the company president said.
This means lessons will resume soon at 18 of the 230 Geos schools that were closed for falling behind in their rent payments and for other reasons as of Wednesday.
In an interview with The Yomiuri Shimbun, G.communication President Hideo Sugimoto said he hopes to return Geos to the black within a year.
“I want to record a profit in a year from now, although there still are costs that may materialize later,” he said.
G.communication also took over the Nova English conversation school when it went belly-up in 2007, but Sugimoto plans to maintain both brands.
“Geos schools have Japanese teachers and beginners may find it easier to take lessons there, whereas all Nova teachers are native speakers. Each has its own advantages and devotees,” he said.
The firm plans to maintain, for the time being, the 230 Geos schools it took over.
If some schools have difficulty resuming lessons, G.communication will help them out by renting rooms in neighboring buildings and taking other measures, Sugimoto said.
G.com has more room for ex-Geos teachers
G.communication Co. will hire some teachers from schools that it isn’t taking over from defunct Geos Corp. because it is currently experiencing a manpower shortage, G.communication President Hideo Sugimoto told The Japan Times on Wednesday.
“Some teachers left (the Geos schools) we took over because they weren’t getting paid,” Sugimoto said in an interview in G.communication’s Tokyo office.
Sugimoto said he doesn’t know how many teachers his company will hire from the Geos schools that will be shut down. G.communication has already said it will keep all of the employees at Geos schools it is taking over.
Nagoya-based G.communication runs language conversation schools, cram schools and restaurants.
Geos will close 99 English-language schools that employ 483 teachers and staff, while G.communication will take over 230 schools that employ 1,059. The company reopened 201 Geos schools last Friday, just three days after Geos filed for bankruptcy with the Tokyo District Court.
It will reopen the remaining 29 as soon as landlords of the branches sign rent contracts, Sugimoto said.
Former Geos employees will first enter work contracts with G.education, an education arm of G.communication, for three months, as had been the style with Geos, and then will sign a contract based on G.education’s style of employment, in which popular teachers get to teach more hours and are paid more, Sugimoto said.
Sugimoto also stressed that the chaos at the time of the failure of Nova Corp., another major language school chain, will not be repeated because of his company’s speedy rescue of Geos. G.communication took over operations of some Nova schools in November 2007.
“People may be worried because of the experience with Nova. In Nova’s case, we took over some of their schools awhile after the company went bankrupt and we had to start in a situation where more than 1,000 teachers didn’t have places to work,” Sugimoto said.
“This time, we raised our hand (to rescue Geos) at an early time,” he said. “If it was a week later, it would have been more chaotic.”
He also said he hadn’t been intending to expand in the language education business, and this move was just the result of salvaging a failed company.
He is also confident of making the former Geos schools profitable in a year, saying G.education will offer better services, such as convenient lesson-booking methods, than rival firms.
“The (English conversation school) market may be shrinking, but there are needs and we will meet customers’ needs,” he said.
At Nova schools, the teacher-to-student ratio is 1-to-3.5, which is “just right,” he said. He will aim to achieve that for Geos schools, whose current ratio is 1-to-2.6, he said.
Geos’ bankruptcy is believed to be tied to its persistent’s attempts at expansion, flying in the face of industry figures that showed the English-teaching market was shrinking amid the economic slump.
According to the Ministry of Economy, Trade and Industry, the monthly number of students enrolled at foreign-language conversation schools plunged from 826,858 in February 2006 to 335,604 in February this year. The corresponding monthly sales figures for the industry over the same period fell from ¥17.2 billion to ¥5.7 billion.
Tokyo’s population hits 13 mil.
The population of metropolitan Tokyo is estimated to have topped the 13 million mark in April for the first time in its history, the Tokyo Metropolitan Government said Wednesday.
The population in the Japanese capital has increased by 1 million over the current decade since surpassing 12 million in 2000.
The population, calculated on the basis of the 2005 national census and monthly tallies of resident registry, was 13,010,279 as of April 1, about 25,000 more than the month before due to job-related and other relocations to the capital for the start of the new business and school year.
The tally broke past the 1 million line in 1876, the 10 million line in 1962 and the 11 million line in 1967. Before reaching 12 million, it had fallen for 10 years from 1987.
The latest increase is attributable to a boom in building of large- scale condominiums in areas like Koto Ward and people moving in to seek jobs in Tokyo, a metropolitan official said.
Chinese taking 2 different routes to Japan
The two Chinese are about the same age and both plan to improve their future prospects by living in Japan. But the similarities end there.
The pair reflect the stark differences among Chinese heading to Japan from the booming coastal areas and the poorer inland regions that have yet to be swept up in the country’s economic growth.
A Yuncai, 19, is from the latter. She lives with her parents and two sisters in one of the houses that line the mountain slopes in the Maanshan district, more than an hour’s drive from Dali in Yunnan province, southwestern China.
The farming family earns about 10,000 yuan (about 140,000 yen) a year, an amount insufficient for their medical and education fees.
Yuncai plans to work as a trainee at a Japanese farm to help her family survive.
“Even if I land a job here, I can earn only 800 yuan a month. In Japan, I will be able to earn more and acquire advanced knowledge. I will remit my earnings to my family, except for living expenses,” she said.
Jin Shaohua, 20, comes from a much different background. Born into a wealthy family, Jin grew up in the coastal city of Suzhou in Jiangsu province near Shanghai.
His reason for going to Japan? He didn’t gain admission to Suzhou University.
Instead, he went to the Nanjing University of Posts and Telecommunications, but his low scores denied him entry into the faculty of economics, as he desired.
His friend who was studying in Japan told Jin through the Internet, “Tokyo is convenient and beautiful.”
Unhappy at school and uncertain about his future goals, Jin decided to study Japanese for one or two years in Fukui Prefecture and then enroll at a Japanese university.
“I’m a little bit excited,” Jin said in early April at Shanghai Pudong International Airport waiting for a flight to Ishikawa Prefecture.
Yuncai’s parents were also a bit excited about sending their daughter to Japan, much to the surprise of Masaichi Tanaka, a 61-year-old farmer in Kamiita, Tokushima Prefecture, who interviewed the teen as a prospective trainee.
Tanaka visited their home in fall last year and asked the parents, “Don’t you have any anxieties about your daughter going to Japan alone?”
One of the parents replied, “We have no anxieties because Japan is a developed and safe country.”
Tanaka said he felt that Yuncai’s experience in the mountains had made her physically strong.
“Because her parents have such a (serious) manner, she must be a serious person, too,” said Tanaka, who chose Yuncai from among 20 people interviewed at a worker dispatch company in Dali.
After Yuncai graduated from a vocational school last year, she worked on the family’s farm. After being chosen as a trainee, she borrowed money to pay 40,000 yuan to the worker dispatch company, Dali Prefecture International Techno-Economic Cooperation Co., for procedural and other fees.
She underwent the company’s training sessions, which last for three to four months and can be likened to boot camp. Trainees wake up at 6:30 am. for a run and get no holidays. Between classes on Japanese and other subjects, they must follow stringent rules, such as how to fold futon mattresses and where to place their cups and socks.
If the company sends a trainee to Japan, it can receive a total of 900 yuan from the central, provincial and local governments.
China has eased its departure and screening procedures since 2004 because exports of workers have become a big source of income.
According to the Japanese Immigration Bureau, about 102,000 people came to Japan in 2008 as trainees in farming, manufacturing and other sectors. About 69,000, or nearly 70 percent, were Chinese, compared with about 28,000 in 2000.
Jin’s “training” for Japan consisted mainly of taking Japanese lessons in China.
He estimates he will need 2 million yen a year for tuition and living expenses in Japan. However, his father, who runs his own company, said, “I will pay all the money.”
Weng Danjie, also 20, left for Japan with Jin for the same reason: She failed to advance to the nursing department of a vocational school.
Weng, who met Jin at the same language school, also has an advantage in her plans.
Although her mother lives in Jiangsu province, her father is a Japanese living in Fukui Prefecture, who often travels to China on business.
Weng said she will live in her father’s house in Japan during her studies.
“If I succeeded in advancing to my favorite school (in China), I would not have decided to go to Japan,” she said.
Wei Haibo, who runs a Japanese-language school in Shanghai, said, “An increasing number of people are thinking about going abroad for studies because they failed to gain entry to their favorite universities or land good jobs.”
Thirty to 40 percent of the students in Wei’s school are considering a trip to Japan for such reasons, he said.
According to the Japan Student Services Organization, about 79,000 Chinese came to Japan in 2009 to study, accounting for 60 percent of all such students.
Foreign nurses deserve helping hand
Given the serious shortage of medical and nursing care workers and nurses, lifting certain restrictions so qualified foreigners in these fields can apply their skills in this country is an obvious solution.
In its fourth basic immigration control policy plan compiled late last month, the Justice Ministry stated it would reexamine the mandatory limit on the length of time foreign nurses and dentists can work in Japan when they hold residential status.
Even if non-Japanese qualify to work as a nurse or dentist after passing state exams, they are not permitted to work here for more than seven years and six years, respectively. A four-year limit is imposed on public health nurses and midwives.
Many foreigners with such qualifications desire to continue working in Japan beyond the set limits. Their aspirations are rightful in view of the fact that they have passed national exams and conquered the Japanese language barrier.
The limits on working years for non-Japanese were mostly probably introduced out of concern that Japanese might be deprived of working opportunities. The restrictions have been criticized as excessive for years. The time limit for foreign doctors was dropped four years ago.
Speed up ordinances’ review
The ministry plans to revise relevant ordinances to abolish time restrictions on all remaining medical professions, including nurses. This is a necessary corrective step. We want the ministry to accelerate its work on revising these ordinances.
The ministry’s fourth basic immigration control plan incorporates a policy to study accepting foreigners in the nursing care field on condition they graduate from universities in Japan and pass state exams.
The population of elderly people requiring nursing care is growing at an ever-quickening pace. The nation has about 1.24 million nursing care workers today; estimates suggest the nation will need almost double that number in 2025.
Meanwhile, many Japanese who have earned qualifications as care workers then opt to work in another field. The physical and emotional demands of a career in nursing care, combined with the low pay, often are too much to bear.
To alleviate the manpower shortage in nursing care, the first step is to improve the working environment for Japanese. However, there is a limit to just how quickly the ranks of Japanese nursing care workers can be increased. Because of this, opening the door to foreign nursing care givers is the right decision.
Remove language barrier
More help also should be extended to the people from Indonesia and the Philippines whom Japan has been accepting as candidates to work as certified nurses and care workers based on economic partnership agreements with the two countries.
National exams for nurses and nursing care workers are dotted with difficult kanji. Last month, 254 foreigners took the exam for nurses, but only three passed.
Indonesian and Philippine examinees have acquired licenses and expertise as nurses and nursing care workers in their home countries. Considering that the pass rate for Japanese examinees stands at nearly 90 percent, the extremely low success rate for foreign examinees can be most probably be attributed to the kanji barrier.
The Health, Labor and Welfare Ministry is reexamining the content of national tests. The revisions include replacing difficult terms with easier ones, such as “jokuso” [褥瘡] with “tokozure” [床擦れ] to mean bedsores.
We welcome this move. But the ministry should go a step further and print kana readings alongside kanji and allow examinees to use dictionaries in their exams.
Classes resume at 200 Geos schools
G.communication Co., which has taken over 230 of 329 schools run by collapsed English conversation school operator Geos Corp., resumed classes at 201 Geos schools nationwide Friday.
Classes at the remaining schools will restart soon, according to G.communication.
The phone was ringing off the hook at one Geos school in Tokyo, where classes resumed at 10 a.m., as students sought information about class schedules and made other inquiries. A female staffer manning the phone was still coming to grips with the events of recent days.
“I’d heard some schools would close, but I never expected the company would go under,” she said. “I also heard that we’ll keep our jobs, so I really don’t know what’s going on.”
Meanwhile, Mizuho Fukushima, state minister in charge of consumer affairs, said after a Cabinet meeting Friday, “We’ll keep an eye on developments so students can take classes without concern.”
Nagoya-based G.communication said students at 99 Geos schools that will be shut down can take classes at other schools taken over by the company if they waive the right to receive a repayment of their tuition fees.
However, Fukushima said she hoped G.communication would provide more details about its plans.
“Some students might regret waiving the right to receive a refund because they live some distance from other schools, or for other reasons,” Fukushima said.
Geos filed for bankruptcy at the Tokyo District Court on Wednesday.
Geos’ fate sealed by failure to react quickly to rapid drop in demand
The failure of major language-school operator Geos Corp. occurred because the company didn’t trim unprofitable branches fast enough at a time when the industry was facing a drastic drop in students, people in the industry said.
Although the bankruptcy of industry leader Nova Corp. in October 2007 damaged the image of the commercial language school industry, the impact this time is likely to be contained somewhat by the swift response of G.communication Co., another language chain that has offered to take over about two-thirds of Geos’ branches.
“I think the biggest factor was the decline in students,” said Masami Sakurabayashi, director of the Japan Association for the Promotion of Foreign Language Education, a Tokyo-based organization that promotes sound management of foreign-language schools. Geos, the second major language school to fail in the past three years, is not a member of the group.
The Ministry of Economy, Trade and Industry said enrollment at foreign-language schools has plunged from 826,858 students in February 2006 to 335,604 this year.
In its attempt to catch Nova, Geos expanded rapidly only to be caught high and dry by the plunge in student enrollment after Nova imploded, and was probably unable to trim unprofitable branches fast enough, Sakurabayashi said.
G.communication Co., which took over some Nova branches, will take over 230 Geos schools and close 99. Geos boasted about 500 branches during its heyday, while Nova had about 900.
“Rapid expansion is very risky with this business because it is hard to maintain quality service,” Sakurabayashi said, referring to the distrust created by Nova, which collapsed after being penalized by the government for misleading advertising.
The language industry has been in decline for the past several years due to Japan’s economic malaise, the global financial crisis and the fallout from Nova’s bankruptcy.
According to Tokyo-based Yano Research Institute Ltd., sales in the industry fell from ¥826 billion in fiscal 2005 to ¥767 billion in fiscal 2008.
But the failure of yet another major chain doesn’t mean the industry is hopeless, some said.
Running a language school chain is manageable if you don’t make the mistake of expanding too rapidly, Sakurabayashi said.
“This is my personal opinion, but running foreign language schools is a profitable business, although you may not make such a huge profit,” he said, adding that the key is to have a realistic goal.
Atsushi Hamai, a spokesman for the major school chain Aeon Corp., said that while it’s true that new enrollment has been in decline for the past several years, the industry is recovering and the company has not seen much fluctuation in its sales and operating profit.
“When Nova was expanding its presence about 10 years ago, we did put a focus on establishing new branches,” Hamai said. “But we think that increasing the number of branches is not the way our company should go, so we hardly create new schools now. Our strategy is not expansion, but to strengthen the inside.”
Some fear that Geos’ collapse and subsequent bad press will give the entire industry a black eye.
“I’m concerned that this issue might bring negative influence to the industry,” said Kunio Hatanaka, head of the All Japan Linguistics Association, another organization of foreign language school operators that included Geos.
“There are many schools that run healthy businesses and try hard to serve customers,” he said.
But the impact is likely to be smaller compared with Nova, Sakurabayashi said, thanks to the aggressive moves of G.communication.
Bankruptcy wasn’t my idea, Geos president states
The decision to file for bankruptcy was not his, the president of language-school chain Geos Corp., Tsuneo Kusunoki, implied in an unusual statement released Thursday.
“The company’s board of directors did not reach a consensus on filing for bankruptcy, and the action was taken by one director and some employees,” Kusunoki said in the statement. “Although it has given the impression that the company filed for bankruptcy, it is actually not the company’s will.”
A Geos lawyer explained that because “three directors could not reach agreement” on the bankruptcy filing, the action was not taken by the board of directors but rather by some executives.
The lawyer stressed that the process is legal.
Kusunoki and another director who did not agree to the bankruptcy filing “insisted on keeping the company alive, disagreed on filing for bankruptcy and refused to put their personal seal” on the bankruptcy document, according to sources who work at Geos.
The filing, dated Tuesday, says the company’s debts total ¥7.5 billion. Hitomi Suhara, a Geos director, told a news conference Wednesday that part of the English conversation business will be taken over by Nagoya-based G.communication.