The Japan Labor Flash
No.41
Email Journal July 1, 2005
Statistical Reports
Main Labor Economic Indicators
TANKAN
Current Topics
Mandatory Employment of Elderly Workers: 76 percent of Firms
Surveyed Imply Revision of Pay System
Nippon Keidanren Publishes Results of the 2005 Spring Joint Wage
Negotiations
Public Policies
System of Shorter Working Hours to be Established for National
Civil Servants
Six Proposals for Addressing Youth Employment
Public Policies
Summer Holidays at Firms Average 7.7 Days
Major Automobile Makers Differ in their Remuneration of Directors
Public Policies
Setting a Target for Net Reduction in Government Personnel
Statistical Reports
-Main Labor Economic Indicators-
http://www.jil.go.jp/english/estatis/eshuyo/200507/index.htm
-TANKAN-
Short-term Economic Survey of Entreprises in Japan
-July 1, Friday, released by the Bank of Japan
http://www.boj.or.jp/en/stat/tk/tk0506.htm
Current Topics
-Mandatory Employment of Elderly Workers: 76 percent of Firms
Surveyed Imply Revision of Pay System-
On June 6, the Tokyo Chamber of Commerce and Industry published
the results of a survey on labor policies conducted among member
firms. The survey, in the form of a questionnaire, targeted 3,000
firms, mainly those related to the Labor Committee of the Chamber,
and 675 of these firms (22.5 percent) responded to the survey.
The survey asked about, among other things, problems faced by
firms regarding employment and personnel policies. Some provisions
of the revised Law on Employment Stability of Older Persons, whereby
firms are obliged to lift the mandatory retirement age and to
introduce an employment extension system, will become effective
in April 2006. With regard to this issue, 76.1 percent of the
firms surveyed replied that "they would have to change their wage
payment system for employees as a whole, or for those at a certain
age or above." Furthermore, 14.7 percent replied that they would
have to reduce the number of young workers hired, and 21.8 percent
replied that they would have to cut various other expenses excluding
wage payments. These findings indicate that mandatory employment of
elderly workers has a significant impact on corporate management.
-Nippon Keidanren Publishes Results of the 2005 Spring Joint Wage
Negotiations-
On June 8, Nippon Keidanren (Japan Business Federation) published
the results, by industry, of labor-management agreements reached at
the 2005 spring joint wage negotiations among major firms (final
compilation), and of negotiations among small and medium-sized
enterprises (third round compilation). These results show that labor
and management at 252 out of 288 large firms (87.5 percent) reached
agreements. The average wage increase (weighted average) of 141 firms
--i.e., 252 firms minus 111 firms for which data on the average pay
hike was unavailable--was 5,504 yen, or an increase of 1.67 percent.
This was an increase of 126 yen or 0.03 percentage points compared
to the previous year. Regarding SMEs with less than 500 employees,
346 firms, or 46.9 percent of the firms surveyed, had reached
agreements with their unions. Of these, the average pay hike (weighted
average) of 325 firms--i.e., 346 minus 21 firms for which the amount
of average pay hikes was unknown--was 3,895 yen, or an increase of
1.51 percent. On average, the margin of increase in pay between this
year and the previous year in the same firm was 71 yen, or 0.04
percentage points.
Public Policies
-System of Shorter Working Hours to be Established for National
Civil Servants-
In fiscal year 2007, at the earliest, the Japanese government will
establish a system of shorter working hours which will permit national
civil servants to work less than eight hours per day, as a measure
to counteract the trend of having fewer children.
Under the current law, national civil servants with children under
three years of age are eligible for "partial leave," whereby
they
can reduce their working hours by a maximum of two hours per day.
However, there have been complaints that this is not enough to have
a significant impact on families. The adoption of the new system will
allow employees to work only four hours per day while they are raising
small children, and is expected, if put into effect, to help balance
the claims of childcare and work.
The government is also considering allowing flexibility to switch
between ordinary and shorter working hours, and will state it in a
report to be published in August together with recommendations of
the National Personnel Authority on revisions of salaries of national
civil servants.
-Six Proposals for Addressing Youth Employment-
In June, a research committee on economy, industry and employment
of the House of Councilors released an interim report which included
six recommendations for addressing youth employment problems. In its
report, the Committee requests the government and others concerned
to improve and increase the number of "job cafes" and other
job
placement facilities; increase opportunities for "trial employment"
and internship programs; and strengthen collaboration with NPOs.
Regarding NEETs, it calls for strengthening cooperation with
specialized institutions; improving or creating a counseling and
assistance system; considering the adoption of a type of "personal
advisor" system as is in use in the U.K.; and increasing opportunities
for young people to get work experience before they finish their
mandatory education. At the same time, the Committee requests a
better understanding of contract work in the manufacturing sector
and the strengthening of control over illegal activities in manpower
dispatch.
Public Policies
-Summer Holidays at Firms Average 7.7 Days-
On June 15, the Ministry of Health, Labour and Welfare published
the findings of a survey on consecutive (summer) holidays scheduled
to be taken in July and August by major firms across the country.
(The survey targeted 1,330 firms, and valid responses totaled 1,157.)
According to the findings, the average length of summer holidays is
7.7 days, a drop of 0.1 day compared to last year's figures. More
than 60 percent of the firms surveyed responded that their summer
holidays would be the same length as last year. In general, the survey
shows that the number of days taken for summer vacations remains
unchanged.
It was also found that 90 percent of firms will provide employees
with three or more consecutive days of holiday in July and August,
while 64 percent will provide seven days or more. Among the firms
surveyed, employees of a manufacturer of vehicles in Hyogo prefecture
will enjoy the longest summer holidays: 21 days in total, consisting
of two nine-day holidays and one three-day holiday.
(Yomiuri Shimbun, June)
-Major Automobile Makers Differ in their Remuneration of Directors-
The total amount of salaries and remuneration for directors paid
by leading automobile makers has been publicized.
Nissan Motor Co., Ltd. paid 1.822 billion yen to President Carlos
Ghosn and seven other executive directors in fiscal year 2004, which
comes to approximately 260 million yen per person. At the shareholders'
general meeting in 2003 it was resolved to put a cap on directors'
remuneration at two billion yen; however, a proposal to increase the
number of directors from the current seven to nine and to raise the
upper limit of directors' remuneration to 2.6 billion yen was submitted
to this year's general meeting. Nissan has maintained the highest level
of remuneration for directors in the Japanese business world.
Toyota Motor Co., Ltd. paid approximately 35 million yen per director
in fiscal year 2004. However, since it halved the number of directors
in the previous year, it is difficult to make a strict comparison with
the 2003 figures. It is estimated, though, that the total amount of
directors' remuneration increased by four to five million yen.
On the other hand, the amount of remuneration paid to directors of
Mitsubishi Motors Co., Ltd. in fiscal year 2004 was roughly halved
from the previous year to about 179 million yen, i.e. about 15
million yen per director. This seems attributable to the retirement
of directors from Daimler-Chrysler, who had received large
remunerations, and to the reduction of the remuneration itself by
30 to 50 percent as a restructuring measure.
Lastly, Honda Motor Co., Ltd. has disclosed information on the
monthly upper limit of remuneration for their directors. It will
reduce the total amount from the present 77 million yen to 60
million yen per month. Behind this move lies the fact that it has
adopted the "operating officer" system, with a reduction in
the
number of directors to 21, and it also intends to increase the
proportion of bonus payments, which will vary according to business
performance.
(Nihon Keizai Shimbun, Mainichi Shimbun, June)
US$=\110（July 1, 2005）
Public Policies
-Setting a Target for Net Reduction in Government Personnel-
The Council on Economic and Fiscal Policy held a meeting in early
June to discuss "Basic Policies for Economic and Fiscal Management
and Structural Reform in 2005 (proposed draft)." On the question
of
how to reach the target of net reduction in the total cost of
government personnel, Prime Minister Koizumi stated, to the
dissatisfaction of the Ministry of Internal Affairs and Communications,
"it is extremely important to leave what the private sector can do
to the private sector and what local governments can do to local
governments. In this sense, too, a target for net reduction is
possible; I believe that we have no choice but small government if
we take into account the current fiscal situation." In line with
this, the focus of attention henceforth will be the setting of a
concrete numerical target.
Continued on;
http://www.jil.go.jp/english/archives/emm/2005/no.41/41_si.html
