• Home
• About/Contact
• Economic Reports
• Research
• Advertising

• Business
• Economics
• Reports
• Finance
• Marketing
• Politics
• Real Estate
• Services
• Retail
• Tech

Subscribe

Japanese wages continue freefall

On Tuesday, the Ministry of Health, Labour and Welfare released its figures on wages for December 2009 and for 2009 as a whole. First, taking a look at the December figures, we see a fall of 6.1% in wages at firms with at least five employees against a year ago, with the average total wage clocking in at 549,259 yen. That figure may seem high, but winter bonuses are usually paid in December, and bonus payments fell by 10.6% against a year ago. December’s overall wage decline follows a 2.4% fall in November. Read more

Nikkei: Panasonic offers best work environment

According to results of a survey released Monday by the Nikkei, employees of Panasonic enjoy the best work environment in Japan. Panasonic moved up one spot from the same survey conducted in 2008, thus regaining the top position. According to the paper, Panasonic’s male employees enjoy substantial time for child-rearing leave.

Panasonic was followed by Toppan Printing, which “tracks employees’ aspirations and efforts to improve their skills, such as where they want to be transferred, the training they have sought, and licenses and qualifications they have obtained, in a database, using the information to help workers enhance their careers.”

The top ten was rounded out by #3 Tokio Marine and Nichido Fire Insurance, #4 Hitachi, #5 Hewlett-Packard Japan, #6 Panasonic Electric Works, #7 Daiwa Securities, #8 NEC, #9 Mitsui Sumitomo Insurance, and #10 Daikin Industries.

Last year’s list was topped by NEC, Panasonic, Hitachi, Mitsui Sumitomo Insurance and Toppan.

GDP up on government spending

Despite the 0.9% rise in GDP over the April-June quarter, there remain some skeptics worried about how strongly Japan will be able to recover from multiple quarters of negative growth. The Nikkei published an article yesterday entitled “Jobs Weakness Could Slam Brakes On GDP Growth, Economists Fear“. The Nikkei puts it simply: “For Japan, the biggest challenge is whether the stimulus measures can create sufficient private-sector demand to trigger a self-sustaining economic recovery.” Of course, this is impossible, as stimulus measures are temporary and mainly serve to increase national debt.

While the government stimulus package has spurred the economy to some degree, we also know that about 290,000 full-time jobs and 470,000 temporary jobs have been lost over the past year. There were 760,000 fewer people employed in the April-June quarter against a year ago. Read more

OECD: Japan’s public pension to provide 34% of salary

According to the OECD’s “Pension at a Glance 2009″ report , Japan’s public pension system is expected to provide 33.9% of salary as pension to workers entering the workforce in 2009. This is the second lowest figure in the OECD, with only Britain trailing Japan. The OECD average for public pension payouts is 59% of salary.

The report also highlights that 22% of Japanese people over 65 had incomes below the what the OECD considers to be its poverty threshold (defined as half of median household income). The OECD average for people aged over 65 living under the poverty line is 13.3%. Read more

Government to encourage workers to take more paid leave?

Over 50% of paid vacation allocated to Japanese workers goes unused each year, and the government is currently looking at way to encourage more workers to take paid leave as part of an effort to increase domestic travel and tourism. According to today’s Nikkei, the government is examining a host of measures that could reduce overcrowding at peak travel times and create new three day weekends.

Fixing holidays so that workers have more three day weekends makes good sense, and could certainly make it easier - though not necessarily more affordable - for workers to travel domestically. The government is also considering staggering summer breaks at schools in order to reduce overcrowding.

However, the campaign to encourage workers to take more paid leave is the most interesting. Apparently, the government has discussed changing accounting regulations to require firms to book reserve provisions for unused holidays as debt.

Would this work? The government estimates that if workers took their full allotment of paid days off that about 1.5 million jobs would be created and about 12 trillion yen in revenue could be generated. Of course, these figures assume that workers will actually travel - and not to Korea - on their extra paid days off and newly found three day weekends. The Nikkei article gives no detail behind the numbers, but they would be good to see.

Job prospects looking bleaker for 2010 graduates

According to the results of a recent Nikkei poll, Japanese firms intend to cut hiring of college graduates by 19.6% next spring, which would be the first drop since 2003 and the sharpest drop in 34 years. The figures released today are much worse than preliminary survey results that were released on March 15 and indicated that companies were planning to cut graduate hiring by 12.6%.

The Nikkei points out that Toyota is looking at a 49% reduction in hires, while Sony is planning to cut hires by 44% and Toshiba is looking at a 40% cut in 2010.

In terms of firms looking at hiring more people, numbers fall in line with what we have expected: Security firm Secom intends to hire 36% more graduates next year, while Tokyo Electric Power is looking at hiring 29% more graduates.

Nikkei: Winter bonuses to fall 2.9%

Back on October 24, we reported on a Keidanren survey that predicted winter bonuses in Japan would fall for the first time since 2002, though the decline was only registered at 0.03%. Today, the Nikkei published the results of forecasts by six private-sector research firms that showed the average winter bonus falling 2.9% to 405,378 yen. This would mark the fourth consecutive fall for bonuses in Japan when summer bonuses are included (the methodology of the Nikkei survey must differ substantially from Keidanren’s - the numbers come nowhere close to matching in these two estimates).

To further muddle the numbers, while the Nikkei predicts the average bonus to be down 2.9%, total bonuses are expected to be at 15.8 trillion yen, down 2.1% from last year, while the number of workers receiving bonuses is expected to rise 0.9%.

Keidanren: Winter bonuses to fall for the first time since 2002

Earlier today, Keidanren (the Japan Business Federation) released a survey of major corporations showing that winter bonuses are set to decline for the first time in since 2002. The survey covered 109 companies in 21 industries that employ over 500 people and are listed on the first section of the Tokyo Stock Exchange.

The decline, however, is slight: Average winter bonuses for salaried employees are projected to be at 904,885 yen, down 0.03% from last year. In 2002, winter bonuses dropped 2.42%. The expected average bonuses at manufacturers moved up 0.3% to 919,461 yen, but fell 2.4% to 822,473 yen at non-manufacturing firms.

The largest percentage rises were seen in machinery and shipbuilding, at 5.64%, while the largest fall was in the steel industry, at 5.06%.

Nikkei: 1.4% fewer job offers to 2009 university graduates, first decline in five years

According to a piece in this morning’s Nikkei, Japan’s corporations are planning to cut the number of jobs offered to graduating university students in 2009 for the first time in five years. In April 2008, the number of job offers made to new graduates was up 5.3% (Recruit had estimated that 2008 hirings would rise 13.0%, in a report that seemed a bit off on the statistics). The Nikkei survey estimates that job offerings to university students will be down 1.4% in 2009.

While Mizuho, Mitsui Sumitomo, Toshiba, Hitachi, Canon and Panasonic all aim to increase their numbers of new hires, and financial firms comprised five of the top ten places on the list of firms looking to increase their number of hires, the Nikkei notes that many financial firms intend to cut down on the hiring of new recruits:

Nomura Securities Co. aims to reduce job offers by 18.5% to 680. Daiwa Securities Group Inc. (8601) will cut its figure by 28.8% to 900. Sompo Japan Insurance Inc. (8755) plans to halve its job offers to 600, while Tokio Marine & Nichido Fire Insurance Co. made a 26.5% cut to 750. Many real estate and housing firms are also reining in their offers.

In addition, competition for talented graduates is intensifying, so corporate job offers have failed to keep up with initial hiring plans. Mitsui Engineering & Shipbuilding Co. (7003) had intended to hire 116 graduates, but will now take on only 87. NTT Data Corp. (9613) has made 550 offers, 50 less than planned.

The situation at Nomura makes sense, given that new employees will be brought in from the takeover of Lehman Brothers. Still, recruiting figures are often decided well in advance, and it is thus difficult to say that the reduction is fully due to Nomura’s recent acquisitions.

Mainichi interview with Bill Emmott: How to view the Koizumi legacy?

Former Economist editor Bill Emmott recently sat down for an interview with the Mainichi Shimbun, and his comments on the Koizumi administration are very good:

I think that it’s right to criticize some part of Koizumi’s reforms for causing this increasing income gap, because the Labor Law reform that his government introduced is directly responsible for this widening gap between rich and poor by creating the conditions under which 30 percent of the labor force are in part time or temporary employment, with much lower benefits. So I think that a new government needs to find a way to change Japan’s Labor Law and remove this incentive for cheap labor and employment and to equalize the rights for all types of workers: full time, part time, contract … there’s no justification for having different rights for different types of workers.

Absolutely!

Koizumi’s Labor Law reform was not a piece of market fundamentalism or a free market-type reform. It’s not included in the market textbook that you should establish a two-tier labor market and strip away protection from one part of the force. So I think that it’s right to criticize the Koizumi administration for that, but it’s not right to say there should be no market-based reform.

Of course, reforms to the labor laws began before Koizumi’s administration, but the income gap became much more notable under his watch. Long term, the question is how this will affect how Koizumi is viewed. Shorter term, can better reforms be put in place in order to equalize the legal status of Japan’s workforce? (I’m not 100% sure about the word ‘rights’ here, but that’s more philosophical/legal hair-splitting rather than practical/economic.)

At any rate, the full interview is here.

Next Page »

Copyright © 2006-2010 Japan Economy News

Privacy Policy | Disclaimer