From the TUC

Workers in Japan let down by Abe’s new spending plans

02 Sep 2016, by in International

Last month Japan’s Prime Minister Shinzo Abe set jaws dropping by announcing a 28.1 trillion yen (£208.1 billion) stimulus package. The package is designed to jump start Japan’s economy that has been struggling with slow growth and see off the threat of deflation.

The important feature of the package for unions is not the incredible amount pledged by the government (which may never really materialise) but the fact Abe explicitly linked the stimulus to reforms that would apparently improve pay and conditions for workers.

Unions in Japan and here in the UK advocate stimulating the economy through investing in workers, better wages and better conditions. But the Japanese union centre RENGO have raised concerns that Abe’s package falls short.

Three of Japanese unions’ concerns particulary overlap with those of unions in the UK, namely:

  1. Not enough investment in decently paid jobs

While Abe’s stimulus plan involves large scale investment in infrastructure, unions are concerned it will lead to the creation of more precarious and lower paid jobs in Japan. For a number of years unions in Japan have been campaigning against the growth of precarious contracts that have been a result of conservative governments’ policies of deregulation in the 90s and turn of the century. In 2014, RENGO estimated that there were over 19 million workers (almost 38% of the workforce) on some form of flexible/precarious contract.

In the UK, the TUC has also raised concerns about the huge growth in precarious contracts such as zero hours jobs with almost two million workers employed on some form of precarious contract.  The TUC has also been calling for the government to invest in infrastructure projects such as HS2, in order to create decent jobs with stable contracts and decent pay, rather than zero-hours low paid jobs.

My colleague Geoff Tiley has also argued that low pay and lack of investment in infrastructure hold back productivity – which helps to explain why the UK and Japan lag behind other OECD countries in terms of productivity.

  1. Gender discrimination remains

Part of Abe’s stimulus package is aimed at providing more childcare support to parents to enable more women to return to work after having children. Japan’s gender wage gap is one of the highest of all the developed economies. One of the reasons for this is that childcare places are scarce, as well as expensive.  Partly due to cultural expectation and partly due to the fact women tend to be earning less to begin with, it is women that overwhelmingly stop working or reduces their hours to fill this gap in childcare.

Japan’s state run childcare services have struggled to retain staff due to low pay and long hours.  Nursery workers, most of whom are women, made 219,200 yen (£1627) a month including overtime in 2015 which is 34% less than an all-industry average of 333,300 yen.

Abe has promised to raise the wages of nursery workers by about £45 a month is a step in the right direction but still means nursery teachers are on low wage so unions say will not mean a significant number of workers will be attracted to the profession.  The high costs of childcare, meanwhile, will continue to prevent women from returning to work.  Unions argue that changes must also take place in the workplace to tackle the gender wage gap.  Unions are calling for an end to discrimination at work which means women – and particularly mothers – are passed over for promotions and pay increases.

In the UK, the TUC has documented similar discrimination faced by women workers. In a recent study the TUC found that women under 33 suffer a ‘motherhood pay penalty’ of 15%, as younger mothers are more likely to be treated badly by employers and to struggle to return to full-time work, partly due to the high cost of childcare. The TUC has called for free childcare to be available from the end of maternity leave and for employers to do more to create good quality, part-time work opportunities.

  1. Minimum wage increases look set to be low

Abe’s stimulus plans also involves a promise to increase the minimum wage. However, Japanese unions say the level looks likely to be below a living wage.  They are calling for the minimum wage to be set through negotiation between government, unions and employers so that costs of living are taken into account.  In the UK, the TUC has also been calling for minimum wage levels to do more to help workers and the economy and for the minimum wage for young workers to be made the same as for those aged over 25 to prevent young workers being used to undercut older workers.

Solidarity between the UK and Japan

We support work by Japanese unions to push for Abe’s spending plans to benefit workers and spread wealth rather than perpetuating inequality and discrimination in the jobs market. Reforms in the right direction in Japan would strengthen similar struggles for workers in the UK.