The National Personnel Authority recommends for the first time a cut in monthly salaries of national public employees

On August 8, the National Personnel Authority submitted to the Diet and the Cabinet their recommendation to revise the wages of national public employees for FY2002.

The system of the National Personnel Authority was described in JLF Vol. 3.

A survey of wages which the National Personnel Authority had conducted, targeting about 7,900 private-sector business offices, revealed that about 20% of the respondents provided neither pay raises nor annual wage increases. For the first time, the monthly salary of national public employee (base pay, dependent allowance, etc.) surpassed that of the private sector by 7,770 yen.

Because of this, for the first time since the National Personnel Authority system was launched in 1948, the Authority recommended that the wages of national public employees be reduced this fiscal year by an average 2.03%, including an average 2% reduction in base pay and a reduction of 2,000 yen from the dependents allowance. The recommendation is aimed at rectifying the wage differences with the private sector. Incidentally, for the past two years, the Authority had recommended that salary raises be deferred.

Concerning bonuses (end-term allowances; diligence allowances), national public employees received an amount equivalent to 0.05 months' pay more than the private sector. Therefore, the Authority recommended that this amount be reduced, and that bonuses instead correspond to 4.65 months' pay per year. This will be the fourth consecutive year that bonuses will be cut.

After the revision, a 40.9-year-old member of the general administrative service will receive a monthly salary of 375,096 yen on average. His or her average annual income will be 6,274,000 yen, which is 150,000 yen less than before the revision.

Since the Japanese government is promoting financial reconstruction programs, the current recommendation will be the highlight of its efforts to reduce budget spending. Therefore, Prime Minister Koizumi promptly announced his intention to implement the recommendations 100%.

The labor unions and the opposition parties (Social Democratic Party of Japan and Japanese Communist Party), meanwhile, opposed the recommendations, saying that they would have far-reaching negative effects on local areas and on smaller enterprises, bringing about stagnation of consumption, worsening the current recession even further, and intensifying deflation.

Newspaper editorial views were mixed. While supporting the recommendations in a lukewarm fashion, many newspapers pointed out the irrationality of continuing to reduce annual salaries while simultaneously restricting basic labor rights. Others called for a bold review of the retirement allowances of high-ranking bureaucrats that the National Personnel Authority failed to mention but which are often criticized as being too high compared with those of the private sector.

1US$＝\118 (September 2002)