Made in Government

Japanese manufacturers on Wednesday announced boosting of wages backed by positive results in their sales. It is fair to say that Japanese economy looks like showing a positive signs for recovery from long-term slump. However, mid-size and small businesses do not have optimistic vision for the future, with laziness for salary increase. Government-led wage policy has not reached the goal it set.

It was Toyota Motor Co. that led the annual negotiations between employers and employees, or spring struggle. Toyota Workers Union requested averaged ¥6,000 of accumulation on basic monthly wage. Managing side answered ¥4,000, which was recognized by the union as a positive response of the company. Cheap yen against U.S. dollar brought great profit through exports to the carmaker. Nissan Motors answered ¥5,000 to the request of ¥6,000. Other manufactures in electrical appliances, including Hitachi, Toshiba and Panasonic, also placed positive answers.

The active wage hike was not brought by merciful mind of employers, but by pressure from the government. Prime Minister Shinzo Abe and his staffs have been reiterating the necessity for trickling down the profits, earned with incentives of unusual monetary and fiscal policies, to the workers. With that request from the government, major corporations reluctantly raised the wage as a matter of fact. It was the reason why spring struggle this year was called government-made.

So, big names like Toyota or Panasonic are ok. How about small businesses supporting those big companies through providing with small parts for high-quality cars or appliances? Seven out of ten are working for mid-size or small businesses. Their consumption has a great significance on Japanese economy as a whole. If they do not feel easiness for their ordinary life, sustainable economic growth cannot be achieved.

Nikkei Shimbun raised a headline, reading “Companies Need to Get Rid of Government-made,” urging independent decision for higher salary. An investigation firm revealed that 37% of mid or small businesses were considering base-up, increased 2% from last year. There is a fact that most middle or small businesses cannot have optimistic vision for raising salary.

Social gap between big and small companies, permanent and temporary employment, urban and local workers and the rich and poor are going to get wider. Even how the government requires employers to distribute their profits, it is the decision of employers to raise the payment as long as Japan is capitalist economy. It is still not sure whether Abe’s economic policy has been appropriate.