Since the Abe administration came to power, there has been much talk about wage increases aimed at expanding domestic demand. This trend is being seen in some large companies and the restaurant industry, where the latter, which are facing a labor shortage, are turning employees who were employed on part-time or casual contracts into full-time employees, enrolling them in social insurance, and working to improve working conditions to secure a more stable workforce. This has resulted in a real wage increase even if take-home pay has not increased.
This trend has been occurring in the workplaces of Japanese workers in South America for over a decade, as small and medium-sized manufacturing and food processing companies have had difficulty securing human resources for a long time. However, the rate of wage increases in the world of foreign workers is not that high, and only a handful of foreign workers who have improved their skills are benefiting from this. Many have endured wage cuts in an unstable employment environment.
The construction industry, which is currently in the spotlight, has raised hourly and daily wages considerably to make up for the labor shortage, but it is still difficult to secure workers, so the government is seriously considering accepting foreign workers.1 From the perspective of the principle of supply and demand, wage increases and improvements in working conditions are fully expected, but this kind of marketability does not work very well in Japanese society. In particular, the nursing care industry is heavily outsourced by the government, so despite the labor shortage, there has been little progress in improving on-site working conditions. Also, while there are increasing reports of wage increases, some restaurants and fast food establishments are shortening their business hours or closing down due to the inability to secure part-time workers for late-night and early-morning hours (it can be said that a decrease in such stores will not actually have a significant impact).
In today's Japan, depending on the type of job, even if wages are raised considerably, no one will want to work there, while if the job is fun and rewarding, even if the hourly wage is not that high, there will still be people. However, in the market for foreign workers in low-skilled jobs, wages have not risen much even with the labor shortage, and hourly wages have been decreasing in most jobs since the late 1990s (although those who have improved their skills and acquired qualifications to operate machines, truck drivers, and highly specialized welders do not seem to have a bad monthly income). The only relief is that the partial tightening of regulations on the Worker Dispatch Law has led to an increase in direct employment by dispatch companies and contractors, which has led to an increase in the number of foreigners enrolled in social insurance.
Recently, I have been frequently asked by Japanese-Peruvians, "How are wage increases decided in Japan?", "Can the Prime Minister or the Minister of Labor decide?", and "What is the basis for the rate of increase?" However, in Japan, unlike South American countries, the president cannot issue a government decree to raise wages, and even though there is a forum for labor-management negotiations known as spring labor offensives, the policy decided there is an agreement between labor and management and is not legally binding to apply to all companies.
Furthermore, foreign workers, including Japanese-descended workers who work through small and medium-sized enterprises, micro-enterprises, and dispatch companies, not only do they not benefit much from the wage increases, but when technical intern trainees from Asia are brought into their companies, they are forced to cut their wages in order to maintain their jobs.
In any case, even if the government has a policy target for wage increases, it will not be applied to all industries and occupations at once. In addition, the presence of labor unions, which are necessary for labor-management negotiations, is low in small and medium-sized enterprises, so employees' bargaining power is extremely limited.2
The government is aiming to expand domestic demand by raising wages and stabilizing employment. However, in Japan, where the consumer market is so mature, it is not so easy to create large demand by developing new products or services. Even if some companies and industries grow with the economic recovery, this may not lead to wage increases, especially for foreign workers. General companies are also actively seeking to target overseas markets more than ever before, or to increase demand from foreign tourists visiting Japan. However, if second-generation foreigners can acquire reasonable skills in Japan and make good use of their language skills, overseas experience, or the diversity they possess, there is a high possibility that they will be able to find a fairly well-paid job in this shrinking market, and developing that will be a major challenge in the future.
Notes:
1. See "Debate over accepting immigrant labor rekindled" 2014.05
http://www.discovernikkei.org/ja/journal/2014/5/21/imin-roudou-ukeire/
2. As of June 2014, the unionization rate was 17.7%, with 9.8 million workers as members (3 million women and 910,000 part-time workers, a trend that has been increasing in recent years). However, while the membership rate is relatively high at large private companies, it is in the single digits at small and medium-sized companies, and is almost nonexistent at companies with fewer than 30 employees.
http://www.mhlw.go.jp/toukei/itiran/roudou/roushi/kiso/13/
http://db2.jil.go.jp/tokei/html/U4801001.htm
© 2014 Alberto J. Matsumoto
