Japan Press Weekly

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2013 January 16 - 22 [LABOR]

Keidanren’s refusal of meeting wage hike demands will exacerbate deflation

The Japan Business Federation (Nippon Keidanren) on January 21 released a report known as the corporate basic policy for the annual spring wage talks, showing its intention to escalate cuts in overall labor costs, and push the government promotion of entry into the TPP and the adverse revision of social welfare services.

In the report, Keidanren states that the business environment has further deteriorated from the previous year and calls on its member companies to refuse any wage hike demands, including the demand for an increase in the basic wage as well as the demand for a regular wage hike.

It also shows unwillingness to raise regional minimum wages, arguing that a minimum wage hike will make it difficult for corporations to maintain jobs as well as create job opportunities.

The report points out that the strongest trigger of the deflation is people’s anxiety for the future and claims that “in order for people to feel safe, sustainable economic growth through successful corporate activities” is essential.

As measures to improve the business environment in order to overcome the deflation through a boost in domestic demand, the report calls for the promotion of Japan’s entry in the Trans-Pacific Partnership free-trade pact and the adverse revision of social welfare programs, reduction in corporate taxes, and relaxation of labor regulations focusing on enabling a further flexibility of the labor market and limitless working hours.

These measures will accelerate a worsening of the deflationary economy and living conditions of the people as a whole.

The biggest factor in the current deflation is that big businesses have arrogantly reduced workers’ wages.

A government survey indicates that the average annual income of private sector workers fell from its peak in 1997 by 580,000 yen over the past 14 years. The total income that all private workers lost amounts to 34.8 trillion yen during the same period of time.

The National Confederation of Trade Unions (Zenroren) and the People’s Spring Struggle Joint Committee plan in this year’s spring wage struggle to hold actions demanding at least a 10,000 yen a month pay raise and at least a 100 yen raise per hour for all workers, the establishment of a binding ordinance on public contracts, and decent employment which includes shorter working hours.

Only a wage hike and better working conditions will contribute to putting an end to the deflationary recession and paving the way for corporate and economic growth.