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Issue # 1404      25 March 2009

Overcome crisis through wage rises and job creation

This year’s labour Spring Struggle is nearing its climax as Japan’s major corporations, including automobile and electronics makers, prepare to respond to labour’s demand for a wage increase.

The Spring Struggle is being waged amid the increasing poverty rate and the collapse of the job market. While many unions are calling for a wage increase as well as job security, there are some large corporations, including those that have an enormous financial capacity, who are emphasising the need for pay cuts.

In order to break through the current economic crisis, it is necessary to force the major corporations to use a part of their huge internal reserves to meet the workers’ demands for wage increases and job security.

Because of restrained wage levels, tax increases, and higher burdens on social welfare services, workers in Japan have long experienced poor living conditions. What’s worse, a sharp increase in the number of non-regular contingent workers, a product of the government’s deregulations, drove them to accept unstable jobs with low wages.

During the ten years from 1997, the ordinary profits of Japan’s major manufacturing corporations marked an 8.2 trillion yen increase and their corporate dividends a 4 trillion yen up. In stark contrast to this, payments for their employees saw a 3.3 trillion yen decrease in the same period, according to the Corporation Statistics issued by the Ministry of Finance.

Since the end of last year, corporate management has made full use of the financial and economic crisis to force workers to accept wage cuts and less overtime work, which meant a drastic drop in their incomes. The move toward dismissals began to affect full-time workers, and not to just contingent workers.

In view of workers’ living conditions being worsened so severely and rapidly, this year’s Spring Struggle is tasked to ensure wage hikes and job security are an imperative.

Japan’s economy is declining much faster than in the US and European economies. This is due to the “structural reform” policies promoted by the Koizumi Cabinet and its successors, which have worsened the people’s living conditions and further distorted the country’s economic structure by weakening domestic demand and increasing dependence on foreign demand. Employment conditions are also worsening faster than during other recent periods of economic recession.

This is because major companies amid the current economic downturn are dismissing contingent workers that they hired during the economic boom. Raising wages and securing jobs are essential to create an economy guided by domestic demand instead of foreign demand.

While leading the job market to collapse by lawlessly eliminating the jobs of temporary and other contingent workers, business circles are insisting that many corporations cannot afford to offer a pay raise. However, it is clear that many major corporations have an over-accumulation of capital and more than enough capacity to raise wages and maintain jobs. Major manufacturing firms had 120 trillion yen in internal reserves in the first three months last year. Using only a tiny part of that amount would enable them to increase workers’ wages and maintain employment.

It is outrageous that some major firms are talking about the need to review the regular pay rise system, which does not even lead to an increase in their total personnel costs.

Corporations have important social responsibilities to maintain employment so that their workers can make a living without undue anxieties. It is irresponsible for them to refuse to increase wages and cut employment while maintaining their huge internal reserves.

Akahata, newspaper of the Communist Party of Japan.

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