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HOME  > Past issues  > 2009 February 4 - 10  > Smaller businesses, not large corporations, need government help: JCP Yoshii
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2009 February 4 - 10 [ECONOMY]

Smaller businesses, not large corporations, need government help: JCP Yoshii

February 6, 2009
Japanese Communist Party representative Yoshii Hidekatsu at the House of Representatives Budget Committee meeting on February 5 criticized large corporations for bullying subcontractors, which are small- and midsized enterprises (SMEs), and demanded that the government take steps to support SMEs.

Yoshii pointed out that during the 17 years up to 2007, companies capitalized at a billion yen or more tripled their dividends to their shareholders and doubled their earned surplus. In stark contrast, SMEs capitalized at 10 million yen or less, which employ more than 70 percent of the total Japanese workforce, reduced not only dividends and earned surplus but salaries for executives as well as employees.

Pointing out that while forcing workers to endure excessive workloads for inadequate wages and forcing SMEs to beat unit prices, large corporations are gaining profits, Yoshii said, “Isn’t this an obstacle to the effort to achieve economic recovery and stable economic growth through boosting domestic demand?”

Minister of State for Economic and Fiscal Policy Yosano Kaoru replied, “It is lamentable that the concept that ‘a company serves its shareholders and thus all it should do is increase dividends to shareholders is rigidly adhered to.”

Prime Minister Aso Taro said, “The idea that large companies have only to pay dividends to their shareholders will not do. Some of them are making a critical review of their being preoccupied by the pursuit of short-term profits.”

Yoshii criticized large manufacturers for “making profits by exploiting their suppliers by cutting unit prices.”

Yoshii said, “The government should conduct an extensive investigation to grasp the actual realities of sub- and sub-sub contractors and take appropriate steps to prevent unreasonable changes or cancellations of orders.”

He also demanded that the government expand the subsidy program for SME employment adjustments, which is provided when SME owners have no choice but to lay off their workers temporarily.
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