Japan joining countries with large income gaps

Good morning everyone,

It's going to start raining later today and into tomorrow morning, so I'm heading out for a run as soon as I finish writing my blog. It looks like it'll clear up on Tuesday, be cloudy on Wednesday and then start raining again on Thursday. You'd think it was rainy season, eh? Ha ha!

In the not-so-distant past, Japan was held up as a great example of everyone from a company executive to the garbage man being able to earn a decent salary. Those days seem to be gone despite PM Abe's promise of equal pay for equal work.

Let's have a look at Mr. Hirano, a temp worker at 'Hello Work'. After taxes, as an irregular temp worker, his monthly salary comes out to approximately Y220,000, and he receives no bonuses. His yearly income is believed to be about half of the other career consultants at his workplace who are on "regular" permanent contracts. According to the Ministry of Health, Labor and Welfare (MHLW), some 60 percent of the staff who worked at "Hello Work" centers nationwide in fiscal 2015 were on irregular contracts.

The percentage of workers on irregular contracts in Japan has continued to rise; that rising trend has remained unchanged since the second administration of Prime Minister Shinzo Abe. Of the 42.69 million people in the Japanese workforce in 1989, 8.17 million were on irregular contracts, comprising about 19 percent of all workers, according to the Ministry of Internal Affairs and Communications. But those figures in 2015 were another story: Of the 52.84 million workers across the country, 19.8 million people, or 37 percent of the workforce, were on non-regular contracts. On average, the wages of "non-regular employees" are about 56.6 percent of "regular employees."

Those on irregular contracts in the private sector are dubbed "regulating valves" used to relieve stress generated by economic fluctuations, and are at risk of being laid off at any time due to any number of reasons, including poor corporate performance. When the world economy fell into crisis after the September 2008 collapse of Lehman Brothers, irregular employees were laid off left and right. But irregular employment is not a phenomenon unique to the private sector. Like Hirano, there are many who work on irregular contracts in the public sector, including in municipal governments.

Prime Minister Abe upholds "equal pay for equal work" to correct the salary disparity between regular and irregular employees as one of the main pillars of his pledge to create "a society in which all 100 million people can be active." But no one thinks such a goal can be easily accomplished.

"The fact that a staffer at a public employment services center is on an unstable employment contract," Hirano says, "is a pretty dark joke."

Hirano's wife works at a college cafeteria kitchen for 910 yen per hour. His only child, a high school student, says he wants to go to college. Once Hirano paid for his son's college preparatory classes, he had zero savings.

He will never get a raise, nor does he get any paid days off for injuries or illness. He doesn't know how long he'll be able to work. "I have no regrets, since this is the life I chose. And it can't be helped that there's a gap between what I get and what regular employees who've been working hard consistently get," Hirano says. "But even so, isn't the gap just a bit too wide?"

When asked about the "equal pay for equal work" plan promoted by Prime Minister Abe, Hirano's expression turns hard. "It sounds fantastic, but it's unrealistic," he says.

Of course, corporations love this system-they save millions and millions of yen by not having to pay pensions or bonuses. But I feel that this system will come back to bite them in the long run. In the past, Japan's society was very inclusive (everyone felt like they were part of something bigger), but now that there is a widening gap between the 'haves' and the 'have-nots', there is a chance that could lead to a break-down in the system.

Hmmm...that's a pretty dark blog, eh? I promise that tomorrow's will be lighter! ha ha!

Have a great day!


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