Business organization rejects wage increase demand and suggests wage cuts

The Japan Federation of Employers' Associations (Nikkeiren) in an extraordinary convention on January 11 published a report on its labor policy calling for draconian cuts in total labor costs and an increased use of cheap labor.

Stressing that the workers' demands for a wage increase is "irrelevant," the report rejects the practice of annual base wage increases. It goes so far as to suggest a review or freeze on a system of annual increase and suggests even wage cuts to reduce total personnel costs.

The report views so-called "work-sharing" as means for a greater variety in forms of employment. It says that shorter working hours should help lessen total personnel costs, including wages and bonuses. It proposes for the "flexible" application of work-sharing so as to lower hourly wages and to make it applied to those who are laid off.

In the name of a "greater diversity in employment," the report recommends greater use of "cheap" labor such as that of part-timers and other contingency workers.

The report insists that an increase in temporary employment is the only way for corporations to achieve productivity improvements without a personnel cost increase.

The two national centers of trade union movement, the National Confederation of Trade Unions (Zenroren) and the Japanese Trade Union Confederation (Rengo), on January 11 criticized the Nikkeiren report.

Zenroren Secretary General Bannai Mitsuo said that the Nikkeiren report is unacceptable because the employers are attempting to shift the consequence of the critical condition of its own making exclusively to workers and the public.

Bannai said the report's proposal for work-sharing and employment of contingency work will just enable corporations to use cheap labor to cut personnel cost. Work-sharing without ending the present long-working hours will cause wage cuts and more contingent jobs.

Sasamori Kiyoshi, Rengo president, said that this year's Nikkeiren report is extraordinary in that it denies the workers' right to an annual wage increase which is a matter confirmed between management and labor. He said, "If the employers dismiss this agreement, we will brace ourselves for a full-scale struggle." He said the report is grossly mistaken to propose work-sharing as a means of cutting personnel costs. (end)