Key corporate labor unions filed their wage demands for the year with management Friday, kicking off the year’s “shunto” spring wage negotiations.
Their demands focus on maintaining regular pay hikes amid the country’s economic conditions and tough employment situation. Under a regular wage hike system, workers have so far been granted an automatic pay increase as their seniority advances.
Wages
Japan Wages Slump at Near-Record Pace of 6.1% as Bonuses Slide
Japan’s wages slumped at a near- record pace in December as employers pared workers’ bonuses, an indication that consumer spending is unlikely to drive the economic recovery.
Monthly wages including overtime and bonuses slipped 6.1 percent from a year earlier to 549,259 yen ($5,056), the Labor Ministry said today in Tokyo. Paychecks slumped an unprecedented 7 percent in June.
“You have to weigh the improvements in jobs against the plunge in wages,” [Azusa] Kato, an economist at BNP Paribas in Tokyo, said before the report was released. “As long as workers’ incomes keep plummeting like this, households won’t feel the benefits of this economic recovery firsthand.”
The decline in paychecks was the 19th in a row, extending the longest losing streak since 2003. Today’s report also showed that average monthly wages slid a record 3.9 percent to 315,164 yen last year, the lowest level since the government started tracking the data 1990.
Large businesses cut winter bonuses by 15 percent to 755,628 yen, the steepest drop since the survey began in 1959, a separate report by the Japan Business Federation showed last month. The money is typically paid in December and is often equivalent to several months of pay.
Year-end bonuses make sharpest drop ever
The average year-end bonus at major Japanese companies this year plunged by 15.01 percent to 755,628 yen, the sharpest year-on-year drop since the records began in 1959, the Japan Business Federation (Nippon Keidanren) has announced.
It is also the first double digit decline for winter bonuses, with the figure standing at the lowest level since 1990, when the average amount was 748,872 yen.
The average payment in the manufacturing industry dropped by 18.46 percent to 728,589 yen, while it declined by 4.77 percent to 834,020 yen for non-manufacturing companies, with both recording their worst slide ever.
Above all, export-oriented businesses were hit hard by the global recession, with the decline standing at 22.81 percent for automakers, 22.14 percent for non-ferrous metal manufacturers, and 21.29 percent for the textile industry. The only exception was the food industry, which marked a slight increase of 0.51 percent.
The survey was conducted on 253 companies with 500 or more employees listed on the first section of the Tokyo Stock Exchange. The data was collected from 164 corporations that provided the amount of winter bonuses settled after labor-management negotiations.
http://mdn.mainichi.jp/mdnnews/business/news/20091219p2a00m0na006000c.html
Panel urges tiny minimum wage raises
Twelve prefectures will likely raise their minimum wage levels by as little as 2 yen and no higher than 30 yen an hour. The small increase reflects the grim economic situation.
A subcommittee of the Central Minimum Wages Council, an advisory panel to the Ministry of Health, Labor and Welfare, proposed Tuesday the slight raise for the 12 prefectures, where minimum wage levels are lower than welfare benefit payments.
For the remaining 35 prefectures, the subcommittee stopped short of suggesting the margin of raises. They will either maintain the current minimum wage or make only a fractional increase.
If the panel’s recommendations are adopted, the national average floor wage–the lowest legally permitted wage–is expected to rise to 710-712 yen an hour, an increase of 7-9 yen.
http://www.asahi.com/english/Herald-asahi/TKY200907290068.html
Aso to urge business leaders to give in to wage demands
If Aso follows through with the request, it will represent the full application of his prime ministerial authority to raising corporate wages across the nation, the sources said.
In addition to higher wages to spur the anemic economy, the government appears ready to implement a long-promised fiscal stimulus policy of handing out cash gifts worth a total of ¥2 trillion to all households across the nation.
In October, the government said that it would ask the business community to comply with the unions’ requests for higher wages as part of the government’s package of additional economic stimulus measures.
The business community is apparently reluctant to comply with such a request in light of Japan’s deteriorating economic conditions.
But Aso’s upcoming bargaining with the business leaders may have the effect of softening or eradicating the business leaders’ expected resistance to union wage demands, the sources added.
Japan’s Aso Will Ask Business Leaders to Boost Wages, Kyodo Says
Prime Minister Taro Aso plans to meet with top Japanese corporate executives next week to seek higher wages for workers, Kyodo News reported, citing people familiar with the matter.
Aso will meet with Fujio Mitarai, chairman of the Japan Business Federation, and other business leaders Dec. 1 in an effort to bolster the economy, the news service said, citing the people.
http://www.bloomberg.com/apps/news?pid=20601101&sid=adkY7yAkRaOg&refer=japan
Nippon Keidanren backs wage hikes, raises concerns on take-home pay
The country’s most powerful business lobby plans to accept pay raises at high performing companies under a set of management guidelines for the 2008 annual spring labor offensive, sources said.
It will be the fourth straight year for Nippon Keidanren (Japan Business Federation) to back wage hikes in the spring offensive, known as shunto.
In a draft report on the guidelines by the Committee on Management and Labor Policy, the business group stressed the necessity of pay hikes in a stronger tone than before by referring to concerns about household budgets for the first time.
http://www.asahi.com/english/Herald-asahi/TKY200712070090.html
Nippon Keidanren to urge members to offer wage hike
The Japan Business Federation (Nippon Keidanren) likely will call on employers to offer wage increases in next year’s spring labor offensive as many major companies are raking in record profits, according to a draft position paper obtained by The Yomiuri Shimbun.
The country’s most influential business group will urge its about 1,300 member companies to funnel extra funds generated by improved productivity and falling labor costs arising from the mass retirement of baby boomers back into personnel expenses.
Nippon Keidanren’s Management and Labor Policy Committee is preparing the position paper, which will be released in mid-December after approval by its directors. The paper is nonbinding for employers, but it serves as the basis for their positions in annual wage negotiations with labor unions.
The draft paper stipulates, “A portion of an increase in added value, which has been supported by the steady improvement of productivity, shall be used as capital for revising total personnel costs [total salaries and other payments given to workers].”
“Revising the total personnel costs” apparently means “wage increase.” The draft paper says this is “to improve employees’ incentive to work” and “to secure human resources.”
The latest wording represents a change in tack over the past few years by Nippon Keidanren.
The group’s basic policy in its paper for 2005 spring labor offensive stated that “raising the wage level is difficult.” But the paper for 2006 said, “It shall be up to the management and labor of each company to make any such decision,” which could be taken to mean the organization accepted a wage increase by employers.
Its paper for 2007, however, stated, “Short-term results obtained by companies’ good performance should be reflected in bonuses and other lump-sum allowances.” This still illustrated Nippon Keidanren’s cautious recognition that an increase in company profits were rather short-term and temporary.
According to Shinko Research Institute Co., more than 30 percent of companies listed on the first section of the Tokyo Stock Exchange likely will post record current profits for fiscal 2007.
Companies should be able to trim labor costs as workers of the baby-boomer generation, who were receiving high salaries, reach retirement age. Meanwhile, an increasing number of companies are raising starting salaries to attract talented staff.
These conditions apparently prompted Nippon Keidanren to take a more positive stance toward a wage increase. This could spur labor unions to press more strongly to have their demands accepted during wage negotiations next year.
However, Nippon Keidanren’s draft still maintains its basic policy that any wage increase should be decided by the management and labor of each company. It is uncertain whether many companies will offer a wage increase because the economic recovery has yet to trickle down to small and midsize companies and regional economies, industry observers said.
“It is outdated thinking to ignore the ability of each company to pay salaries and raise the pay-scale across the industry,” states the draft paper, which also maintains that temporary improvement in business performance should be reflected in bonuses and other lump-sum allowances.
Those comments suggest Nippon Keidanren gave due consideration to the growing risk emerging in the performance of not only small and midsize companies but also large companies.
Concern over an economic slowdown has been growing in the United States, the largest importer of Japanese products, due to the subprime mortgage loan turmoil. This anxiety has been compounded by a surge in material prices caused by high oil prices, which is starting to squeeze the earnings of Japanese companies.
“There are many sources of concern for the economy, such as the yen’s rise against the dollar and surging oil prices,” said Junko Sakuyama, an economist at Dai-ichi Life Research Institute. “It’s difficult to expect that a wage increase is a foregone conclusion in next year’s spring labor offensive.”