Welfare Expenditures Paid by Japanese Firms
This issue of the Japan Labor Flash will introduce the findings of the 2005 Survey on Corporate Welfare Expenditure conducted by Nippon Keidanren (the Japan Business Federation).
The survey targeted 1,685 firms which belong to industry organizations affiliated with the Federationor which were members of the Federation; 645 firms responded (firms in the manufacturing sector accounted for 49.8% of the responses and those in the non-manufacturing sector 50.2%; firms with fewer than 1,000 employees accounted for 41.6% and those with 1,000 or more employees 58.4%). The number of employees per firm who responded averaged 3,775, their average age being 40.5. The survey covered employees who join health insurance schemes, thus it includes some part-time workers together with what is termed regular employees.
Welfare expenses are definable as the sum of statutory welfare expenses (expenses borne by firms for social insurance premiums, etc. stipulated by law) and non-statutory welfare expenses (expenses voluntarily paid by firms for the welfare of their employees).
The average cost of monthly welfare expenses among firms in fiscal year 2005 was 103,722 yen per worker, an increase of 1.3 percent compared to the previous fiscal year, renewing previous records for the seventh consecutive year. Of these, statutory welfare expenses accounted for 72.7% of all expenses at 75,436 yen, an increase of 1.8 percent from the previous fiscal year. (39,814 yen was for employees' pension insurance premiums; 25,887 yen for health and nursing insurance premiums; 9,176 yen for employment and workers' accident compensation insurance premiums; 509 yen for child benefit contributions; and 48 yen for others).
The proportion of non-statutory welfare expenses to welfare expenses as a whole was 27.3%, at 28,286 yen (of which 13,962 yen was for payments related to housing; 6,088 yen for catering and various fringe benefits, called "life-support" in the survey; 3,127 yen for medical and health support; 2,224 yen for cultural, sports and recreational activities; and 891 yen for congratulatory or condolence payments), a slight increase of 0.1% from the previous fiscal year.
A notable fact is that the recent change in insurance premium rates, which grew faster than the growth rate of the total amount of cash earnings, pushed up the statutory welfare expenses. This trend is expected to continue and poses a difficulty for firms. Non-statutory welfare, on the other hand, used to be considered important and was provided in the form of better company-owned residences and rest homes as motivations for employees under the lifelong employment system; now, however, an increasing number of firms are dispensing with such fringe benefits, as if the said system itself were beginning to be undermined. While firms reduce housing-related payments, the financial burden of medical and health care, nursing care, and various other forms of family assistance is increasing.
Over the years, the views of beneficiaries - that is, employees - on corporate welfare services have changed considerably: fewer employees wish to participate in recreational activities arranged by their companies, as more people wish to have their salaries increase rather than receive welfare benefits. Nowadays, it seems, firms whose entire staff take a trip together are a rarity.
US$=\120 (February 15, 2007)
