No. 47@2010/02

Address: Rodo-Soken
Maison-Hirakawacho501,
1-9-1,Hirakawacho Chiyoda-Ku,
Tokyo, 102-0093 Japan
Phone :
+81-3-3230-0441
Fax :
 +81-3-3230-0442
URL :
http://www.yuiyuidori.net/soken/
E-mail :
 rodo-soken@nifty.com

Use a part of huge 'internal reserves' for workers

Japanese workers' demand in Spring Struggle

Rodo-Soken Study Group on Workers' Conditions
January 2010

Japan does not have the system to determine the terms and conditions of employment in industrial labor agreements. Most Japanese unions are company-based organizations. This makes it easy for capital to divide and rule workers so that the terms of labor contract are determined at each company.

In order to overcome this weakness, which is derived from the fact that workers are organized at each company, Japanese unions have developed a unique form of struggle known as the "Spring Struggle" or spring labor offensive. In the February-April spring season, company-based unions join forces in their struggle in each industry in order to establish a socially reasonable amount of wage increase to be applied to all Japanese workers, including unorganized workers.

Japanese financial circles and large corporations maintain hostile stance toward labor in the Spring Struggle. They use their influence on their company unions to repeatedly attempt to gut the Spring Struggle.

The National Confederation of Trade Unions (Zenroren), which is the national trade union center that consistently faces up to this corporate attack, is leading the Spring Struggle by making use of its positive traditions.

The Japanese Institute of Labor Movement (Rodo-Soken) publishes an annual "White Paper on People's Spring Struggle" in cooperation with Zenroren to help advance the various initiatives in the Spring Struggle. The annual report presents various kinds of data that will help understand the present state of Japanese workers and their working conditions.

Below is the summary of the features of working conditions in Japan, focusing on the basic data on working hours and wages. It reveals how large corporations are increasing profitability at the cost of workers' hard work.

Long working hours

Many Japanese workers are being forced to work excessively long hours. According to the Ministry of Health, Labor and Welfare's "Monthly Labor Survey" report, the average number of hours worked per worker per year at offices employing 30 or more workers was 1,820 in 2008, down 38 from the previous year, and down 48 hours from 1998 (See table 1). The Japanese government and business circles tout these changes as an improvement to US or British levels.

However, the reduction of working hours in statistics is mainly due to the strategy of financial circles and large corporations to replace full-time regular workers with contingent workers. The number of full-time regular workers in Japan decreased to 33,720,000 in 2008 from 37,800,000 in 1998. By contrast, the number of contingent workers increased by 5,790,000 to 17,400,000 during the same period. Most contingent workers are part-timers or temporary workers sent from staffing agencies. This is why hours worked decreased in appearance.

What about hours worked by workers in general in Japan? The monthly government report quoted above gives figures for workers in general and part-time workers separately. It shows that the total number of hours worked per year increased to 1,995 in 2008 from 1,984 in 1998. The number fell in 2008 largely due to the economic crisis triggered by the failure of Lehman Brothers in September 2008, which forced many manufacturers to reduce their production and curtail operation. The average number of hours worked in 2007 was 2,033. In fact, it remained higher than 2,000 after 2002. The average hours worked by part-time workers was 1,166 in 2008.

The government figures do not explain all what the excessively long working hours in Japan is about. Forced overtime work without pay is prevalent. There are many workers who are not paid for their overtime work. Forcing workers to work overtime without pay is a violation of the Labor Standards Law and therefore is a crime.

Worse still, unpaid overtime work is more prevalent than ever. According to the Ministry of Health, Labor and Welfare report on its supervision and guidance to correct labor practices regarding the payments of overtime premiums, 1,553 companies were found to have forced workers to work overtime without pay in fiscal 2008. As a result of the correction, a total of 19.6 billion yen was paid for overtime work in back pay (See Table 2). However, this is a tiny portion of unpaid overtime work. Due to a shortage of Labor Standards Law enforcement officers, the labor enforcement office is still unable to expose all the practices of unpaid overtime work.

In order to unravel the practices of forced unpaid overtime work in government statistics, an effort is underway to estimate how unpaid overtime work is forced on workers by using the method of finding out differences of hours worked between the "Monthly Labor Survey" report by the Ministry of Health, Labor and Welfare and the "Labor Force Survey" by the Internal Affairs and Communications. While the "Monthly Labor Survey" compiles responses from offices, the "Labor Force Survey" looks at household situations and compiles workers' responses. The latter may better reflect the hours actually worked.

The number of hours worked per manufacturing sector employees in 2008 was 2,132.6 according to the "Labor Force Survey" and 1,987.2 according to the "Monthly Labor Survey". This suggests that the difference, 145.4 hours, represents overtime work without pay.

The reality is that many Japanese workers are forced to work excessively long hours, longer than explained by the finding of the "Monthly Labor Survey."

Wages

Wages have been declining in Japan since the latter half of the 1990s. The National Tax Agency report "Statistical Survey of Actual Status for Salary in the Private Sector" shows the average amount of annual salary per worker decreased 7.6 percent in 10 years, from 4,648,000 yen in 1998 to 4,296,000 yen in 2008 (See Table 3).

The major factor that contributed to lowering wages was an increase in the number of contingency workers. The average amount of wages is 65-70 percent of that for regular full-time workers. An increase in the number of contingent workers pushes down wages for regular full-time workers as well. The number of low-wage workers whose annual income is less than 3,000,000 yen increased by 3,479,000 in 10 years up to 2008. In the private sector, these low-paid workers accounted for 39.7 percent in 2008, up 7.3 points from 1998. With low-wage workers increasing in number, the number of workers earning more than 3,000,000 yen is decreasing for all income groups. This means that wages are lowering for all Japanese workers (See Table 4).

The hourly amount of the minimum wage is determined in every one of the 47 prefectures, including Tokyo. At present, the highest is Tokyo's 791 yen. Nagasaki and Okinawa rank at the bottom with 629 yen. The national average is 713 yen. Guidelines for establishing the minimum wage are established separately in four regional blocs.

Large corporations are making huge profits

Japan's large corporations capitalized at one billion yen or more have further increased international competitiveness through cutting as much labor costs as possible. They are increasing sales in overseas markets, including the United States. Large corporations increased ordinary profits from 12.4 trillion yen in 1998 to 32.2 trillion yen in 2007. Even in 2008, the year of the Lehman shockwave, they made 19.4 trillion yen, an increase of seven trillion yen from 1998.

Major Japanese corporations have for many years amassed huge amounts of internal reserves in addition to increasing ordinary profits. What is called "internal reserves" consist of the portion of profits that are reserved instead of being used to pay dividends to shareholders and bonuses for executives. The increase in the amount of internal reserves in the last decade was more than four times that registered in the previous decade. The total amount of internal reserves was 241 trillion yen in 2008, up 98 trillion yen from 1998.

Large corporations used these plenty of funds to make capital investment and direct investment abroad, thus taking a lead in promoting casino capitalism by financial speculations. The outstanding balance of their net assets abroad increased 110 trillion yen to 356 trillion yen between 1998 and 2008.

Large corporations that put the profit-first principle into practice at the cost of workers are making the Japanese economy more dependent on exports. This will in turn prevent domestic demand from increasing. Triggered by the Leman shockwave, the Japanese economy is in crisis, which is even deeper than in the United States and European countries. Large corporations' tyrannical activities are to blame for this.

The role of the labor movement is even greater today. In this year's Spring Struggle, unions are called upon to make progress in the struggle to achieve a meaningful wage increase and measures to improve the working people's living conditions. This struggle is essential for turning the Japanese economy from one of depending on foreign demand into one attaching importance to boosting domestic demand in order to pave the way for achieving an economic recovery on its own.

# # #

Table 1
Changes in average number of hours worked per worker per year by type of job
@ All workers Regular workers Part-time workers
Fiscal
year@		 Total
hours
worked		 Hours
worked
within
contract		 Extra
Hours
worked		 Total
hours
worked		 Hours
worked
within
contract		 Extra
Hours
worked
 Total
hours
worked		 Hours
worked
within
contract		 Extra
Hours
worked
1995 1913 1775 138 2008 1855 153 1183 1157 26
1996 1912 1764 148 2010 1847 163 1176 1148 28
1997 1896 1748 148 1999 1835 164 1164 1135 29
1998 1868 1734 134 1984 1832 152 1157 1129 28
1999 1848 1714 134 1990 1834 156 1150 1122 28
2000 1854 1714 140 1999 1835 164 1172 1141 31
2001 1843 1710 133 1990 1835 155 1170 1138 32
2002 1841 1702 139 2000 1836 164 1172 1135 37
2003 1853 1706 147 2016 1843 173 1184 1145 39
2004 1834 1685 149 2015 1836 179 1171 1132 39
2005 1834 1682 152 2012 1832 180 1176 1133 43
2006 1842 1686 156 2024 1837 187 1182 1138 44
2007 1850 1690 160 2033 1841 192 1195 1150 45
2008 1820 1668 152 1995 1813 204 1166 1124 42
Source: Monthly Labor Survey (for offices employing 30 workers or more)

Table 2
Amounts of unpaid
overtime premiums paid
in back pay
Fiscal year billion yen
FY 2002 72.4
FY 2003 238.7
FY 2004 226.1
FY 2005 232.9
FY 2006 227.1
FY 2007 272.4
FY 2008 196.1
FY 2008 196.1
Fiscal year begins April 1.
The FY 2003 figure covers October 2002-March 2003
Source: Ministry of Health, Labor and Welfare

Table 3
Declining wages
Year Average annual salary
(Thousand yen)		 Changes from
(1998 equals 100)
1998 4,648 100.0
1999 4,613 99.2
2000 4,610 99.2
2001 4,540 97.7
2002 4,478 96.3
2003 4,439 95.5
2004 4,388 94.4
2005 4,368 94.0
2006 4,349 93.6
2007 4,372 94.1
2008 4,296 92.4
Source: National Tax Agency: Survey on private sector salaries

Table 4
Increasing working poor
Number of people of different income levels (Thousand)
Annual income@ 1998 2008 difference
Less than 1,000,000 yen 329.4 383.1 53.7
1,000,000 - 2,000,000 463.9 684.4 220.5
2,000,000 - 3,000,000 678.3 752.0 73.7
3,000,000 - 4,000,000 811.8 777.1 -34.7
4,000,000 - 5,000,000 658.7 630.0 -28.7
5,000,000 - 6,000,000 479.6 434.7 -44.9
6,000,000 - 7,000,000 348.5 281.1 -67.4
7,000,000 - 8,000,000 242.8 199.1 -43.7
8,000,000 - 9,000,000 164.7 134.8 -29.9
9,000,000 - 10,000,000 110.3 87.5 -22.8
10,000,000 - 256.6 223.5 -33.1
Source: National Tax Agency: Survey on private sector salaries

Table 4-2
Changes in number of contingent workers
1998 1,173
1999 1,225
2000 1,273
2001 1,360
2002 1,451
2003 1,504
2004 1,564
2005 1,633
2006 1,677
2007 1,732
2008 1,760
Source: Ministry of Health, Labor and Welfare, Labor Force Survey

ooOOoo

From Rodo-Soken Events

*November 2009 - Rodo-Soken announced "Proposals for resolving economic crisis by having large corporations use a part of internal reserves to benefit workers as well as society and help increase domestic demand."

*December 2009 - Rodo-Soken held a symposium marking its 20th founding anniversary with the theme "For establishing humane work and life."

Japan Research Institute of Labor Movement
(Rodo-Soken)
Rodo-Soken is a labor think tank that carries out research and studies on labor-related issues in cooperation with the National Confederation of Trade Unions (Zenroren), the national trade union center representing the class interests of the Japanese workers, in order to help advance the Japanese trade union movement theoretically as well as practically in response to the needs of the movement.

Japan Research Institute of Labor Movement
Rodo-Soken
Address: Maison-Hirakawacho501, 1-9-1,Hirakawacho Chiyoda-Ku,
Tokyo, 102-0093, Japan

Tel +81-3-3230-0441 Fax +81-3-3230-0442

URL http://www.yuiyuidori.net/soken/
E-mail rodo-soken@nifty.com