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2014 February 12 - 18 TOP3 [LABOR]

Abe’s labor reform will decrease workers’ wages by 42 trillion yen: think tank

February 14, 2014
The Abe Cabinet’s labor reform plan will decrease workers’ wages by 41.9 trillion yen or about 9% of Japan’s GDP, according to estimates released by the Japan Research Institute of Labour Movement (Rodo Soken) on February 13.

What the government aims to accomplish is to increase the number of temporary workers by relaxing regulations on their use and allow employers to use more workers under the “discretionary work” system in order to avoid paying them overtime pay. It is also attempting to introduce “the limited regular employment system” in which workers are exempted from working overtime and being transferred in exchange for accepting lower wages and a higher probability of being dismissed than workers who have conventional full-time positions.

The labor think tank calculated the amount of decrease in wages to be caused by Abe’s reform plan.

A regular employee turned into a “limited regular” employee will suffer a decrease of 550,000 yen in annual income. A worker under the proposed working hour system will lose 1.66 million yen in overtime a year. Annual income of non-regular workers will decrease by 127,000 yen due to the relaxation of related labor regulations.

Rodo Soken Vice Secretary General Fujita Hiroshi said, “The decrease in wages based on our calculations is much larger than we expected. The labor reform under so-called ‘Abenomics’ economic policies will deliver a hard blow to workers.”
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