KOGA Says! RENGO's Statement by General Secretary

KOGA Says!
Statement on Central Minimum Wage Council Report

26 July 2006
  1. On July 26th, the Central Minimum Wage Council endorsed that it would show the opinion of academic and other experts in the public sphere which indicated that FY 2006 regional minimum wage revisions should "target a ¥4 raise for Ranks A and B, a ¥3 raise for Rank C, and a ¥2 raise for Rank D" to individual local minimum wage councils. (All prefectures are divided into four ranks)

  2. During the deliberations over targets for wage raises, employers claimed that it was not appropriate to indicate real numerical target amounts when taking into consideration that: a) the wage increase rate for Rank D is zero for the second consecutive year according to Chart 4 in the 2006 survey results on wage revision status and b) perceptions of the economy and business confidence varied by region, industry, and business size.
    Labour side responded and claimed as follows. (1) Although the economy has recovered steadily and corporate performance has improved overall, workers' livelihoods have been left behind. It is our pressing necessity to respond to low income wage-earners. (2) Within the context of diversifying employment patterns it is extremely critical to guarantee a national minimum wage. (3) It is necessary to look at surveys RENGO has conducted and compare our standards with those of other countries; bring about a low rate of influence and wage levels that people can actually live on. (4) Raising the minimum wage does not instantly increase whole labour costs.

    Further, the labour side emphasized that based on an acknowledgement of these things, when creating wage raise targets in order to gain an perceptible minimum wage the committee should submit target figures in the two-digit range based both on current cost of living levels and various wage indexes as well as trends in circumstance changes, which must at the very least greatly exceed last year's. In a bid to raise the level of wages for lower wage earners and to assure their effectiveness, labour placed themselves in direct opposition to the employer’s side by stressing the necessity to clearly improve regional minimum wage levels.

  3. Moreover, members representing the public sphere proposed the idea that the committee should revise how it calculates its target amounts (distinguish the revision rate by Rank when proposing targets, such as +0.6% for Rank A, +0.6% for Rank B, +0.4% for Rank C, and 0.0% raise for Rank D.) Labour strongly opposed this idea as this is a case of revising the very system of establishing targets itself which has been a customary practice until now (calculated by the same rate of increase for each Rank) and that this was not the place for such a discussion. As a result, this issue will be discussed and finalized with some adjustments before deliberation for next year’s targets.

  4. The opinions of members of the public sphere at this time collectively take into consideration the idea that each Rank had the same basic rate of increase and the special circumstance that economic conditions vary greatly in each Rank. Members representing labour were unsuccessful in coming up with any targets that would clearly lead to an improvement of wage levels. However, labour concluded that it was successful in: confirming that the same rate of increase would be applied in principle for each Rank, a partial halting of the idea by members of the public sphere to distinguish revision rates by Rank, rejecting the employers request “not to show any numerical targets in the findings" and obtain real numerical amounts. This resulted in the acceptance of handing down the opinion of members in the public sphere to individual local minimum wage councils.

  5. From now on, each local minimum wage council will work on concrete deliberations for revision. On July 24th, at its nationwide meeting for officials in charge of minimum wage RENGO endorsed its position to "make the utmost effort to bring about raises keeping absolute minimum wage levels in high regard and based on the points made by labour at the deliberations over wage raise targets as well as the opinions by the members in the public sphere."

  6. With regard to the problem of the minimum wage system, further study is supposed to continue toward the end of the year as opinions differ greatly between labour and management at the (Ministry of Health, Labour and Welfare) Labour Policy Council Minimum Wage Panel. RENGO will push ahead with reform activities in light of the wage revision results of organized workers in order to realize wage levels that enable all workers to maintain a basic level of subsistence.