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News : International Last Updated: Apr 24, 2009 - 5:31:05 PM


Japan's temps accounting for 35% of the workforce in the firing line
By Finfacts Team
Dec 5, 2008 - 8:21:55 AM

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Japan's Prime Minister Taro Aso at a meeting of the Council on Economic and Fiscal Policy at the Prime Minister's Office on Dec 03, 2008: Aso urged Japan’s business leaders on Monday to raise wages and secure employment in light of slowing consumption and people’s growing concerns over future living conditions - - requests that will likely be ignored.

Japan's temps, or nonpermanent employees account, for 35% of the workforce - - up from 24% in 1998 and 18% in 1988  - - are bearing the brunt of the current recession.

The Wall Street Journal says that temps earn about two-thirds what permanent full-timers do. Temps' contracts usually run for less than a year; they can often be hired and fired with just a few days' notice and receive no severance.

Isuzu Motors last month announced that it will fire all its 1,400 temps and while Japan's official employment rate is till below 4%, the temps remain in the firing line as the current recession  is set to worsen.

The Journal reports that on Thursday, two temp workers in Isuzu's engine plant north of Tokyo, filed a lawsuit demanding that the company allow them to continue their contracts until they expire. On Nov. 17th, one of them was handed a sheet of paper informing him that his current contract, which expires in September, would end nine months early.

It's not that permanent workers in the world's second biggest economy, are in clover.

Bloomberg said last March that Toyota pays workers an average of ¥348,530 (€2230) a month and Honda pays ¥363,085 (€2,324).

The World Bank said in December 2007, that Japan ranked sixth with the UK among the most expensive countries in the world, ahead of Ireland in fourth place.

The Wall Street Journal reported on Friday Jan 04, 2008 that one reason Japan wasn't growing faster than its then 1.5% annualized rate lies in a shift in hiring by companies like Hino Motors Ltd. The truck-making unit of Toyota Motor Corp. was paying record dividends, but it was also filling thousands of factory jobs with a new kind of employee: temporary workers who are paid as little as 1,150 yen, or $10.50, an hour and get few benefits.

The Irish minimum hourly wage is €8.65 - $11.

According to the World Bank study that was published in December 2007, the most expensive economies are Iceland, Denmark, Switzerland, Norway, and Ireland with indices ranging from 154 to 127. The United States ranked 20th in the world with a base index of 100, lower than most other high-income economies, including France, Germany, Japan, and the United Kingdom. Ireland's index was 127 compared with Japan's 118.

At Toyota and its subsidiaries and affiliates in Japan, 110,000 people now work as temps or part-timers, according to the Federation of All Toyota Workers' Unions, which has 290,000 full-timers as members.

Among Japanese workers aged 25 to 34, about 26% are temps, compared with 14% a decade ago.

In the US, where only about 4% of the work force in 2005, were classified as temps in a US Labor Department survey, the gap between rich and poor has been growing wider since the 1970s. According to the nonpartisan Congressional Budget Office, the wealthiest 20% of households accounted for 45.4% of total US income in 1979, but claimed 53.5% in 2004.

In March 2008, the Japanese government and trade unions appealed to employers to increase wages, which had fallen 11% between 1997 to 2007, according to the labour ministry reports. However, leading exporters such as as Toyota, Honda and Toshiba agreed to pay rises for the third straight year but while the principal electronics union had demanded a ¥2,000 (€13, £10, $19.44) monthly wage increase, the companies only conceded a ¥1,000 increase. (€6.50, £5, $9.72)

Japan's then Prime Minister Fukuda on March 6th told the Keidanren, Japan's biggest business lobby, to improve efforts to raise wages and stimulate consumer spending.

``We won't change our attitude even though we also think the same way'' as Fukuda, Toyota's President Katsuaki Watanabe said on March 7th in Tokyo. ``I told the labour union that we can't easily increase our costs because of business conditions and intensified competition in the world.''

Toyota Dividend Policy - March 31, 2007 Statement: One of Toyota's key management policies is to prioritize returns to shareholders, and while improving and strengthening our corporate culture we are aggressively expanding our business in order to continue increasing earnings per share. With respect to the dividends, we are targeting a consolidated dividend payout ratio to 30% in the medium - to long term and a greater distribution of the earnings by taking into consideration various factors, including the business results for each fiscal year and new investment plans. In addition to responding to changes in the business conditions, we have also acquired our shares in order to increase improve capital efficiency.

Although we expect to see growth in the global auto market going forward, we will use our internal fund reserves for securing a stable operating base, as well as for up-front investments to improve our product strengths, develop next-generation technologies, deploy domestic and overseas production and sales infrastructure. Regarding the dividends for the last term, the interim dividend in November 2006 was 50 yen per share, and the dividend at the end of the fiscal year was 70 yen per share, which resulted in an annual dividend of 120 yen per share and a total dividend value that amounted to 384.665 billion yen. As a result, our consolidated dividend payout ratio reached 23.4%.

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