The JIL Labor Flash Vol.45
Email Journal 01.07.2003
Statistical Reports
Main Labor Economic Indicators
Current Topics
Wage hikes by large companies this year were the second lowest ever
Public Policies
The government draws up a 3-year plan to reverse the rising tide of
youth unemployment
News Clippings
Retirement benefits likely to be cut by 100 billion yen ...etc
Special Issue
What small- to medium-scale businesses look for in metropolitan
governments' labor administrations
Statistical Reports
-Main Labor Economic Indicators June 2003-
http://www.jil.go.jp/estatis/eshuyo/200306/econtents.htm
-TANKAN-
Short-term Economic Survey of Entreprises in Japan
-Tuesday July 1, released by the Bank of Japan
http://www.boj.or.jp/en/stat/tk/tk0306.htm
Current Topics
-Wage hikes by large companies this year were the second lowest ever-
Nippon Keidanren, the Japan Business Federation, announced the
results of its survey of major companies' spring 2003 labor-management
negotiations. The survey targeted 294 companies representing 22 major
business categories. The average wage hike at 185 companies whose data
on average wages were available was 5,391 yen, up 1.65%. The rate of
increase was slightly higher than the record low of 1.59% (a 193-company
average wage hike of 5,249 yen) posted a year ago.
The average wage hike of 162 manufacturing companies was 1.74%, down
0.02 percentage points from the previous year, while that of 23 non
-manufacturing companies was 1.40%, up 0.11 percentage points.
By type of business, the automobile sector had the largest pay raise
rate of 1.91%, followed by food (1.88%), shipbuilding (1.85%), cement
(1.83%) and textiles (1.80%). Meanwhile, large decreases were registered
in the machinery/metals, commerce and distribution, pulp/paper, and
printing sectors.
Describing the overall situation, Nippon Keidanren commented, "Most
large corporations settled for a zero raise in basic monthly pay and
hikes in annual pay only, and, as a result, their wage hike rates
remained at more or less the same level as the previous year."
Nippon Keidanren also pointed out the following characteristics of
this year's spring labor-management negotiations: (1) the internally
set pattern of deciding employee wages based on a company's personnel
expense payment capabilities became more common, replacing across-the
-board wage hikes; (2) negotiations were conducted from the perspective
of the sum total personnel expense management, with a growing number
of companies introducing a system of performance-linked annual bonus
payments; and (3) many companies were reexamining their practice of
placing excessive emphasis on seniority and were revising their periodic
pay raise system and wage structure with the goal of eventually
introducing a merit-based wage system.
Public Policies
-The government draws up a 3-year plan to reverse the rising tide of
youth unemployment-
The government announced a comprehensive program for promoting the
employment of young people. The program was drawn up by the Strategic
Council to Foster a Spirit of Independence and Challenge in Youth,
comprising four Cabinet ministers representing the Ministry of Health,
Labour, and Welfare; the Ministry of Economy, Trade and Industry; the
Ministry of Education, Culture, Sports, Science and Technology; and
the Cabinet Office, respectively.
Continued on;
http://www.jil.go.jp/english/archives/emm/2001-2003/2003b/vol.45/youthunemployment.html
News Clippings
-Retirement benefits likely to be cut by 100 billion yen-
Hitachi Corporation has decided to abolish its corporate pension's
assumed investment yield system, currently based on an annual 4.5%
fixed interest rate. In its place, it will introduce in October a cash
balance plan adopting a variable interest rate system.
With interest rates currently at ultra-low levels, this would
almost certainly lead to reduced retirement benefits. From April 2002,
companies have been able to manage their corporate pensions under the
variable interest rate system. Hitachi will become the second major
company to adopt this system following Matsushita Electric Industrial.
Since Hitachi maintains pension assets amounting to approximately 750
billion yen, among the largest pension funds in Japan, the company's
shift to the variable interest rate system is likely to spur similar
moves among other corporations.
By adopting variable interest rates, companies can reduce pension
-related burdens and minimize their adverse effects on business
performance. By introducing the new system, moreover, companies can
reduce their retirement benefit obligations by approximately 100
billion yen.
(Nikkan Kogyo Shimbun, June)
-JAL and ANA introduce one-month unpaid leave system-
Japan Airlines, a member of the Japan Airlines System (JAL) Group,
will introduce in July a one-month unpaid leave system targeting all
employees. All Nippon Airways (ANA) will also introduce a system in
August that targets employees of the entire Head Office who have shown
an interest in applying for this program.
Both companies have drastically reduced their number of flights because
of Severe Acute Respiratory Syndrome (SARS), and will use the program
to cut personnel expenses and improve management efficiency. They expect
the program to generate cost-cutting effects totaling several hundred
million yen this fiscal year.
Under this one-month unpaid leave system, employees who have shown
an interest in applying for it will be chosen and take leave of absence
by the month. In selecting these individuals, the company will make
sure to avoid choosing multiple members of the same departments or
posts. Employees taking their leave of absence can use this period
in any way that suits them, such as going overseas to study a foreign
language, simple recuperation, or leisure travel.
(Nihon Keizai Shimbun, May-June issues)
Special Issue
-What small- to medium-scale businesses in Tokyo look for governments'
labor administrations-
The Tokyo Chamber of Commerce and Industry conducted a questionnaire
survey in May 2003 targeting its member companies. (Of the 1,610 companies
to whom the questionnaire sheets were sent, 304 sent in their replies,
giving a collection rate of 18.9%.) The findings identified the employment
and management policy problems that these companies were facing, as well
as what they expect of the labor administration.
One thing that drew particular notice was that over 80% of the
respondents agreed that the scope to which the "discretionary labor
system" (the system of paying wages not by hours of work but in
accordance with performance and/or professional duties) applies should
be expanded among white collar workers.
Continued on;
http://www.jil.go.jp/english/archives/emm/2001-2003/2003b/vol.45/small_medium.html
