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Japan’s labor force: Lower bonuses, more part time workers

The Ministry of Health, Labor and Welfare’s most recent report on the state of Japan’s labor force is not encouraging. According to the report, 6.2% of Japan’s workers are satisfied with their current pace of pay increase, compared to 15.7% in 1990. We also see that since 2001, the proportion of Japan’s workforce categorized as part-time workers has increased from 38% to 44%.

Those reporting seeing an increase in salary fell from 23.7% in 1978 to 6.2% in 2005, while those who found their jobs to be meaningful fell from 30.5% to 16.6% over the same time.

For those workers who are lucky enough to be on salaried status, this summer’s average bonus will be down on the average for the first time in six years, though the decline is only 0.08% to 909,519 yen. In the food industry, however, bonuses are projected to fall 5.38% to 781,057 yen. This might give something of a clue as to how food companies are managing to avoid passing on the full costs of increased production directly to consumers in the form of higher prices.

Bonuses appear to be split right along the manufacturing line. Those working at manufacturing firms will see an average 0.2% rise in their bonus, to 932,782 yen. On the other hand, those working at non-manufacturing firms will see an average 1.51% fall, to 840,098 yen.

The ministry also said that merit-based wage systems are contributing to an erosion in worker satisfaction, as they are often being used by firms as a cost-cutting measure. The ministry would like to see more transparent evaluation systems as well as the limiting of merit-based pay systems to those sectors in which it helps to increase worker satisfaction.

The government is also planning to push small and medium sized firms into adopting corporate pension plans. Currently, some 32,826 firms make use of the government’s qualified pension plan. Most of them are small and medium sized enterprises. The plan is set to be abolished in 2012.

Meanwhile, more trouble has been found at the ironically-named staffing company Goodwill Group. According to the Yomiuri, the firm booked 1 billion yen in hush money as an expense when making a 3 billion yen retirement payoff to the president of Crystal, a company it acquired in 2006.

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