Japanese workers mark this year’s May Day amid continued hard economic times and a harsh employment situation. This is an opportune time for serious discussion on the role labor unions can play to create a society where people can toil with hope for the future.
Japan’s unemployment rate in February remained stuck at relatively high 4.9 percent. (The government said Friday the jobless rate for March increased to 5 percent.)
In 2009, full-time workers grossed an average monthly wage of 294,500 yen ($3,130), including allowances, but excluding overtime pay and bonuses, according to the labor ministry. The figure represents the fourth consecutive year of decrease. Also, the margin of decrease, 1.5 percent from 2008, was the largest since 1976 when comparable data became available.
Bearing the brunt of the job crunch are non-regular workers and employees of small and midsize companies.
Many of the requests for advice received by the Labor Consultation Center, a nonprofit organization, come from people working for smaller companies. Non-regular workers accounted for nearly 30 percent of the inquiries. The center, which is supported by the National Union of General Workers Tokyo Tobu, received a record 600 or so requests for consultation in March. Thirty percent involved issues related to dismissal.
As globalization intensifies, many companies are locked in fierce competition with overseas rivals. Many full-time workers have been replaced by dispatched and other non-regular staff. While these people have weaker job security, they now account for one-third of the nation’s work force.
As a result, there is a strong sense of crisis within Rengo (The Japanese Trade Union Confederation), the nation’s largest labor umbrella organization.
At Rengo’s central May Day rally held Thursday in Tokyo, Rengo President Nobuaki Koga called for “solidarity among all workers.” The rally was attended by many non-regular workers. This is because the May Day meeting for such people, which until last year was held separately, has been integrated into the central event. Three years ago, Rengo set up a special center to help non-regular workers.
For this year’s shunto spring labor negotiations, Rengo has promised to do more to improve the working conditions of all working people. It has also begun talks with the temporary staffing service industry for better working conditions for temporary workers.
Rengo’s mainstream members are company-based unions that organize mainly full-time employees of large companies. These unions have been supporting the traditional Japanese system of lifetime employment and seniority-based pay scales. As these traditions have been crumbling, however, Rengo is under immense pressure to tackle issues related to the new reality.
Corporate activities are straddling national borders, while differences in employment conditions between regular and non-regular workers are growing in and outside the nation. Given this background, labor unions will keep losing their influences if they continue to remain focused on domestic problems without seeking international cooperation.
If Japanese labor unions intend to adjust to this age of globalization, they should, for instance, make policy proposals to spread the European-style principle of an “equal wage for work of equal value” to narrow the wage gap between regular and non-regular workers. At the same time, they need to cooperate more closely with their overseas counterparts.
A good start would be for the company-based unions belonging to Rengo to demand better treatment of non-regular workers during their negotiations with the management. Through their actions, they should demonstrate their commitment to improving the fortunes of fellow workers, despite differences in employment status.
Unions should be inspired by the achievement at Hiroshima Electric Railway Co., which has put all its non-regular workers with renewable one-year employment contracts on the regular payroll.
Prime Minister Yukio Hatoyama attended Rengo’s May Day rally. The organization provided the largest power base of the Democratic Party of Japan in last year’s Lower House election.
But such endorsement by the nation’s leader is meaningless unless labor unions start speaking out and acting for the well-being of all workers.
Wages
First May Day in Post-LDP Japan: Workers Say, “Nothing Has Changed”
Over the last ten years, wages in Japan declined 10% even as the profits of big corporations doubled.
The average manufacturing worker saw a month’s pay disappear from his annual earning last year. Meanwhile, none of the Democratic Party’s electoral promises — the removal of the Futenma base, health care reform to relieve the hardship of the elderly, labor law reform to diminish the exploitation of contract workers hired thorough employment agencies, and so on — has been kept.
Wages see first rise in 22 months
Wages rose for the first time in 22 months in March after a pickup in manufacturing led to a sharp increase in overtime pay, the labor ministry said in a preliminary report released Friday.
Workers at companies with five employees or more earned ¥275,637 a month on average, with overtime and other nonscheduled pay gaining 11.7 percent to ¥18,204, the ministry said.
Their scheduled pay, however, shrank 0.2 percent to ¥245,503 on average, marking the 20th consecutive monthly decline.
“It still remains to be seen if overall cash wages will continue growing as they have,” a ministry official said.
The Health, Labor and Welfare Ministry said overtime rose 13.3 percent overall in March, led by a sharp 56.1 percent jump in the manufacturing sector.
Overall wages data for January, meanwhile, were revised to a decline of 0.2 percent from the preliminary 0.1 percent gain reported in early March.
Separately, the ministry said a total of 83,114 businesses had applied for government subsidies to maintain employment in March, up 3,378 from the previous month and the first rise in two months.
Although applications from big businesses dropped by 260, those from small businesses leaped by 3,638, it said.
Japan Mar Average Wages +0.8% Y/Y, 1st Rise In 22 Months
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.
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.”
Year-end bonuses down 9.3% on year
Average year-end bonuses paid to workers at businesses with at least five employees declined last year by a record 9.3 percent from the previous year to less than 400,000 yen, the labor ministry said Wednesday.
The average year-end bonus stood at 380,258 yen, marking the first time it has fallen under 400,000 yen since the survey was first taken in its current format in 1990.
“Businesses whose earnings have deteriorated amid the economic slowdown in the aftermath of the collapse of Lehman Brothers are reducing their bonus payments to workers,” a Health, Labor and Welfare Ministry official said.
Workers in the manufacturing industry received an average 437,406 yen year-end bonus, down 14.8 percent from the previous year; service sector workers took home an average 315,877 yen, down 12.8 percent; and wholesale and retail sector workers got 277,112 yen, a reduction of 11 percent.
The nationwide survey was taken at about 33,000 business establishments.
Big firms approve pay raises
Carmakers, electrical manufacturers and other major domestic corporations on Wednesday offered to give their workers mandatory annual pay raises in response to their labor unions’ demand in this year’s wage hike talks.
Their replies were perceived as satisfactory to labor unions at these companies, most of which had demanded automatic annual pay raises–known as teiki-shokyu, or teisho–amid the protracted recession.
Their offer came at the peak of this year’s annual labor-management wage hike negotiations.
Meanwhile, the leading corporations’ responses to requests for greater seasonal bonuses–usually paid twice a year–were mostly disappointing to their organized labor.
For example, Toyota Motor Corp. declined to fully accept the union-demand level of bonuses, meaning it has refused to do so for two consecutive years. Such was also the case with responses from management at electrical manufacturers.
Earlier, Japanese Trade Union Confederation (Rengo) President Nobuaki Koga said teisho wage hikes should be treated as a lowest limit acceptable to member unions in this year’s wage hike bargaining.
Annual wage hikes negotiated between labor and management consist of a teisho automatic pay raise, and what is known as beisu appu–simply, be-a–or an increase in the base wage scales adjusted to the age of individual workers and the length of their continuous employment.
On Wednesday, Toyota offered to pay annual bonuses equivalent to five months’ basic pay plus 60,000 yen, compared with its union’s demand worth five months’ basic wages plus 100,000 yen. The fall below the union-demanded level for two straight years was the first since 1982, when Toyota Motor Co. and Toyota Motor Sales Co. were merged to create the current Toyota Motor Corp.
This seemed to reflect a projected operating loss to be incurred by Toyota and its massive recalls, according to analysts.
Meanwhile, Nissan Motor Co. fully accepted its union’s demand equivalent to five months’ base pay, and Honda Motor Co. 5.7 months’ basic wages.
Nissan also offered to increase its average monthly pay for young employees by 200 yen in consideration of the financial circumstances surrounding them nowadays, compared with its labor’s demand of 1,000 yen. The carmaker also pledged to give its workers a teisho automatic pay raise.
Prior to this year’s annual wage hike bargaining, Rengo said it would strive to gain teisho hikes, instead of demanding be-a increases in the base wage scales laid down by corporations in each industry. With Rengo’s basic wage hike policy, labor unions at most major corporations demanded only teisho raises.
In the initial stage of this year’s negotiations, management at major corporations took a hard-line stance, even hinting they would refuse to give workers teisho pay hikes. In the end, however, corporate executives accepted the labor side’s demand for teisho raises in the belief that doing so is necessary to maintain their employees’ morale, according to a Mitsubishi Electric Corp. official in charge of labor affairs.
Another probable factor behind their offer was the slight sign of an economic recovery, as shown by an improvement in industrial production, an analyst said.
Last year, some electrical manufacturers imposed a freeze on their teisho pay raises in the wake of wage hike bargaining. As circumstances stand today, however, no major corporation is seeking to do so.
But this does not necessarily mean that the long-running practice of labor and management treating teisho increases as a given will go unchallenged. During this year’s wage hike talks, in fact, management at some top-ranking corporations told their unions that they wanted to reconsider the amount of teisho hikes in future negotiations. This shows corporate executives likely will continue discussions with labor over the propriety of treating teisho raises as a matter of course, according to analysts.
Toyota workers here get bonus
Toyota Motor Corp. workers are likely to secure bonuses equivalent to at least five months’ wages for this year, sources involved with this spring’s annual labor-management pay negotiations said Thursday.
The Toyota union is seeking annual bonuses worth five months’ wages plus ¥100,000 in this year’s “shunto” talks, while management continues refusing to accept the demand in full as the automaker is caught in serious difficulties amid a series of global recalls, they said.
Toyota management earlier indicated it would grant bonuses amounting to less than five months’ wages but has changed its stance as the firm’s unconsolidated operating loss turned out to be smaller than anticipated.
In addition, Toyota executives consider it necessary to respond to the union’s demand to some extent so employees and management can work together to overcome the current difficulties and regain consumer confidence, the sources said.
Average wages mark 1st rise in 20 months
Average monthly wages including overtime pay at companies with more than five employees rose to 273,142 yen in January, up 0.1 percent from a year earlier, marking the first yearly increase in 20 months, the Health, Labor and Welfare Ministry said Wednesday.
Meanwhile, average hours worked, including overtime and worked holidays, reached 136.7 hours per month, up 0.3 percent, marking the first yearly increase in 18 months, supporting the view that the economy is picking up, according to a preliminary report produced by the ministry.
In particular, overtime worked by those in the manufacturing sector–a key barometer in assessing changes in economic trends–rose 30.1 percent to 12.1 hours.
Overtime working hours rose 3.4 percent from a year earlier to 9.4 hours.
Average per capita income up for fourth straight year
The national average per capita income has increased for the fourth consecutive year, according to the Annual Report on Prefectural Accounts for fiscal 2007 released by the Cabinet Office.
The figure, averaged from prefectural averages, came to approximately 3.05 million yen, a 0.7 percent increase from fiscal 2006. While the variation coefficient dropped for the first time in six years, it still remained high, indicating wide disparities in income among prefectures; there was a nearly 2.5 million yen difference between prefectural per capita income in top-earning Tokyo and Okinawa Prefecture, which came in last place.
Twenty-nine prefectures experienced an increase from the previous fiscal year.
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