Reducing poverty among workers is urgently called for; wage increase if imperative all the more because of the coronavirus pandemic

Statement by Obata Masako, president of the National Confederation of Trade Unions (Zenroren) at House of Representatives Budget Committee meeting, February 24, 2021

National Confederation of Trade Unions (Zenroren) President Obata Masako appeared at public hearings of the Budget Committee of the House of Representatives on February 24, 2021. She spoke about the harsh conditions of the workers amid the coronavirus pandemic and related problems to be dealt with in the name of the Japanese workers and labor unions and from the viewpoint of gender equality. She pointed out the pressing need to increase workers’ wages and raising the minimum wages all the more because of the pandemic, stressing the need to cut back military expenditure and use a part of the internal reserves amassed by large corporations.

Below is the text of her prepared statement.

Statement by Zenroren President Obata Masako at House of Representatives Budget Committee hearings on February 24, 2021

I am Obata Masako, president of the National Confederation of Trade Unions (Zenroren). Thank you for giving me this opportunity to explain the position of the workers and the trade unions on the fiscal 2021 government budget proposal.

In the compilation of the FY2021 budget (for April 2021~March 2022), it is particularly important for budget allocation to focus on policy measures to save lives in times of pandemic and to increase funding for supporting employment and workers’ livelihoods, which are the foundation of the national economy. Improvement of various institutional policies is also called for. Recently, former president of the Tokyo Organizing Committee of the Olympic and Paralympic Games Mori Yoshiro’s discriminatory comments about women sparked calls for taking a fresh look at society from the viewpoint of gender equality. Regarding labor-related issues, contradictions caused by the coronavirus pandemic are concentrated on the women workers most. I believe the need now is to reconsider how the government budget should be compiled from the viewpoint of gender. That said, I want to take up several points.

1.We call for wage increase and improvement of working conditions for care workers who work to protect lives and livelihoods

First, in the midst of the coronavirus pandemic, essential workers, who are supporting people’s lives and livelihoods, are being forced to work under harsh working conditions. Many of them are women. Please take a look at the document made available to committee members. It is on the wages of nurses, nursing care workers, childcare workers, who are essential for healthcare, nursing care, childcare, and other social welfare services.

Nurses are national license-holding professionals, but they do not get a raise in wages, including bonuses, even though they have gained experience. Their wage levels are so low that they are often referred to as “bed-ridden” wages in their workplaces. Wages for nursing care workers and childcare workers are even lower. Wages for home care workers, caregivers at nursing facilities, and childcare workers are no more than 3,000,000 yen (28,000 US dollars).

These workers are license holding professionals. Nevertheless, they are forced to endure the low paying positions. Isn’t this apparently due to gender-bias which takes it for granted that wages can be lower for childcare, nursing care, care giver and other welfare-related workers on the grounds that they only do “domestic work-like jobs”? This has become clearer amid the ongoing coronavirus pandemic.

At a time when the coronavirus is spreading, workers in healthcare, nursing care, childcare and welfare services are working hard side by side with the increasing risk of infection in an extremely strained environment. With no end to the spread of infection in sight, they are not free of uncertainty while attending to patients, care facility residents, or children. They are enduring the long working hours and excessively heavy workloads. But they are left very low-paid.

Let me quote from what workers commented on the situations in the workplaces in a recent survey concerning the Spring Struggle.

“I have little money left after paying back the scholarship, paying taxes and setting aside living expenses. Even though I use a high level of professionalism in contributing to the interest of the hospital, I get paid too little. Young people are losing motivation to do hospital jobs and many of them quit their workplace in disappointment.”

Japanese healthcare services. I believe that it is necessary to make medical services more accessible by improving medical services fees so that our society will become a better place where people can live in good health. Lives are more important than anything else.”

“Care givers’ are performing demanding jobs, but the wages do not meet them.”

“Childcare workers are working at the risk of their lives in support of parents who work for medical institutions without closing the facilities while the declaration of state of emergency is in place. But the government spends no money to support or console them. This makes me sad to see jobs at childcare centers and other welfare services maintained solely by workers getting motivated by enthusiasm or by the worthy objectives they have set. In the midst of the coronavirus pandemic, if workers’ compensation and annual income remain stagnant, the number of workers who support working parents will continue to fall.”

We request the government to embrace these serious calls and take measures and secure funds to improve the wages and working conditions of the essential workers who support the people’s lives and livelihoods. Specifically, we are demanding that the government secure funding for substantially increasing professional personnel, including medical doctors, nurses, medical engineers, caregivers, and childcare workers, for improvement in medical service fees and nursing care service fees, and for improving benefits and other additional pay also for contingent workers.

Helping medical institutions make up for revenue shortfalls caused by the pandemic is also indispensable for the safety of the people.

We know that the government has implemented coronavirus relief measures with three supplementary budgets for FY2020. But no more than 1.2 trillion yen (about 11 billion US dollars) was delivered by the end of January. This means that support measures are not sufficient. The relief funds should be delivered as swiftly as possible.

At the same time, medical institution that do not accept coronavirus inpatients remain in a difficult situation. The government’s financial support to these medical institutions is far from meeting the needs, as clear from the situation up to the third supplementary budget. The community-based health care is delivered as a package. Non-coronavirus hospitals are being asked to do more to accept non-coronavirus patients transferred from coronavirus hospitals, including rehabilitation patients. We strongly request that the FY2021 budget provide funds for helping hospitals make up for revenue shortfalls so that they can secure and improve treatment of healthcare professionals protecting the lives of the community residents.

2.Far-reaching resolution of widening inequality and rising poverty is called for

Secondly, the state is called upon to fulfill its responsibility for the far-reaching resolution of the widening income inequalities and growing poverty.

An organizing committee that includes Zenroren on December 19 last year held a consultation event at Hibiya Park (in central Tokyo) to help working people overcome the coronavirus pandemic. On December 29, 30 and January 2, a wide range of labor unions joined the Labor Lawyers’ Association of Japan in holding a consultation event to help people solve pandemic-related problems. About 70 percent of the people who came to these events were in their 20s to 50s, and women accounted for 20 percent. Thirty percent of the visitors had fewer than 1,000 yen (about 9.5 US dollars) in wallets. There were people who lost their jobs and were experiencing hardships. Let me quote what they said at the consultation.

“I was fired as a temporary worker by a deep-fried chicken shop. I had earned 200,000 yen a month. I have difficulty finding a job.”
“It has become difficult again to find a short-term temporary job due to the pandemic. I was able to earn no more than 300,000 yen (about 2,800 US dollars) this year (2020). I was advised to apply for public welfare assistance, but I chose to look for a job instead of depending on welfare assistance.”
“I have been working more than 20 years as a day laborer in construction, but today, there are almost no job openings. I can’t pay the rent.”

In a survey conducted by a nonprofit organization called “Single Mothers’ Forum,” about half of the respondents said their “work time” has decreased. More than 70 percent said that their earnings have fallen or become zero. One respondent commented, “I take one meal a day. My children have two meals on holidays.” Another said, “I no longer have breakfast. I instead drink hot water from the water server in the office.” Still another said, “I live on money I began to withdraw from my small savings and a lump sum benefit of 200,000 yen (about 1,900 US dollars) from the state. I have only 8,000 yen (about 77 US dollars) in my wallet.” To begin with, many of these workers are low paid, and have little savings. What’s more, their work time has been reduced, forced into business closures. There are teachers find it difficult to go back to school after school closures. This is how many people have been left without earnings.

Those people who have never thought of being in need may become needy and cannot afford to buy food if they spend one month or two without part time jobs due to business closures. The pandemic has revealed that people are experiencing impoverishment that has never been seen in the past.

I think that two problems underlie the present impoverishment.

One is that workers’ wages are too low. Even before the outbreak of the coronavirus, real wages were not only stagnant but continued to decline for many years. In addition, employers have rapidly replaced permanent workers with contingent ones. Many companies have hired low-paid contingent workers to do the main jobs that were done in the past by permanent full-time workers. This has driven the Japanese labor market into anomaly.

Real wage index that takes into account consumer price index shows that Japan’s average wage has fallen by 10 percent since it peaked in 1997. In a span of 20 years, real wages have increased by 20 to 60 percent in most countries. It is no exaggeration to say that Japan is the only major country to experience a negative growth.

With low wages being the trend, nearly 40 percent of single-person households and a little more than 20 percent of households of two or more members are without savings. There has emerged a large group of people who are unable to make ends meet if their monthly earnings drop a little even though in the past, they were able to make ends meet if they have a job even if their lives were not necessarily very easy.

This low-wage structure is based on the increasing use of contingent workers, many of whom are women working as complementary household earners, a “cheap labor force” and as the employment adjustment valve. This in turn is expanding the contradictions and difficulties amid the coronavirus crisis. There is a lack of the idea that wages for securing a normal life and bringing up children mut be guaranteed. Part time workers account for 22.5 percent of all women workers, and 41 percent of them are low-wage workers earning around minimum wages. In addition, you may realize that there are many workers who are paid as low as minimum wages among the essential workers. This is the source of impoverishment which I mentioned earlier.

In 2017 as well as in 1997, 50 to 70 percent of women workers are low-wage earners with an annual income of fewer than 2.5 million yen (about 23,800 US dollars). Women workers have for many years been low wages earners who may not be able to earn her living by herself. The income group of male workers with annual income of less than 2.5 million yen doubled in size from 1997 to 2007 in all age groups. Moreover, the ratio of male workers earning more than 5 million yen sharply dropped. All this shows that the present low-wage structure for women and contingent workers is extended to the male contingent workers. The ratio of female contingent workers who are the head of households, increased from 30 percent in 2002 to 38.8 percent in 2019. The ration of male contingent workers who head households also increase from 6.2 percent to 8.1 percent. A similar trend applies to single persons. You may realize that the ratio of contingent workers has sharply increased among workers who support their household budget.

The whole of this is low wage structure has been produced because the government has left intact the idea that women can remain low-wage earners on the grounds that they work to complement the household budget. The need is to create a structure that enables every worker to maintain their living with one person’s earnings.

Zenroren is calling for the minimum wage to be raised to 1,500 yen (about 14 US dollars) per hour and for a national uniform minimum wage system to be established. It has conducted a minimum cost-of-living survey in 26 prefectures, including Tokyo and found that everywhere in the country, the average young person needs to secure the minimum cost of living by earning 1,500 to 1,600 yen (about 14 to 15 US dollars)per hour if the worker works 150 hours a month. For fiscal 2020, the national average of the minimum wage was 902 yen (about 85 US dollars)per hour, and that was up one yen from the previous fiscal year.

The coronavirus pandemic should no longer be used as pretext for shifting its burden onto workers. In fiscal 2021, the government should begin a process of eliminating the differences of minimum wages between regions and setting to substantially raise them. If the present low wages remain into the future, the country will have to undergo another lost two decades as it did in the crisis that followed the collapse of the Lehman Brothers.

Support to small- and medium-sized businesses is essential for raising the minimum wage. Increasing support to those businesses that are affected by the coronavirus pandemic will lead to paving the way for securing employment, raising wages at the bottom, and even boosting the regional economy. We are demanding a sharp increase funds for helping small- and medium-sized businesses and making the relevant measures viable. We are demanding that measures be taken to help maintain small- and medium sized businesses. We are demanding that the rates of social insurance contributions be set according to ability to pay in a progressive system, asking large corporations to shoulder a proportional share of burden. We are demanding that the consumption tax rate be cut to five percent (from the present 10 percent) and that the tax exemption limit be raised. We demand that the plan to introduce a new, mandatory consumption tax invoicing system be revoked. We are demanding that the government continue to accept application for and payment of the first benefit to help continue doing business so that everyone who needs the benefit can receive it. We are demanding a second delivery of the benefit to help continue doing business in proportion to size of business and a second delivery of benefit to help pay the rent.

The other problem concerns job security.　While there are people who face dismissals or unilateral termination of employment contracts, a large number of workers are forced out of work even though their status as employees is maintained. Something needs to be done to deal with the problem.
　
The Internal Affairs Ministry’s labor force survey shows that the number of contingent workers fell by 750,000 in 2020 from the previous year. The number included 500,000 women. Nomura Research Institute (NRI) estimates that there are 900,000 women part-timers who are temporarily out of work without jobless benefit which they are entitled to.

It’s been revealed that employers at restaurants, hotels and other tourism-related businesses, as well as in the distribution and retail sectors, have unilaterally excluded contingent workers from the work shift and refused to pay leave allowances. Shortening of business hours and cutbacks on work shifts are directly affecting women workers as well as contingent workers.

The employers must pay leave allowances to workers who have been asked to take a leave and maintain their employment. It is necessary for the government to continue with the government subsidies for employment adjustment program’s special measures.

The government emergency financial aid to contingent workers who are forced to take a leave should not be limited to those at small- and medium-sized companies. The program needs to be reformed to deliver aid money also to contingent workers at large companies. The plan that has been made available is partial and limited. We demand that the program for contingent workers at small- and medium-sized workers be expanded to cover the whole contingent workers.

We also believe that it is necessary to strengthen regulation and carry out institutional reforms on contracts for shift work and leave allowances with the aim of having employers fulfill their responsibility.

3. There are financial resources

Growing economic inequality, which has been made even clearer, must be redressed. It is necessary to make society more equitable. The role of the state is great on this score. We believe that it is possible to push ahead with the measures I have mentioned if the way the taxes are levied and the way the tax money is used are changed.

In 2019, large corporation capitalized at 1 billion yen or more added one trillion yen to their internal reserves, bringing the total to 45.9 trillion yen. Even in the midst of the coronavirus pandemic, share prices rose to higher than 30,000 points, and Japan’s GDP grew at an annualized rate of 12.7 percent for the October-December quarter of 2020. That was the second quarter in a row to register a sharp growth. If large corporations claim that their internal reserves are amassed in the event of an emergency, we believe that a part of them should be used to help small- and medium-sized subcontractors and help workers whose wages have been cut to the point where they have difficulty making ends meet. It will also be possible to collect more in tax from the large corporations by levying taxes on internal reserves or by making taxes progressive.

There is no point increasing military expenditure at a time when priority should be given to protecting people’s lives from the global coronavirus pandemic. We demand that military expenditure be cut so that more money can be used for anti-coronavirus programs, public health and healthcare needs, and for extending assistance to people in need.

From the view point of gender equality, we strongly demand that the present low-wage structure be reviewed, that the minimum wage be raised. We also demand measures to stabilize the employment and realize the principle of equal pay for equal work.

Finally, as I am a former elementary school teacher, I want to comment on a bill submitted in the current session of the Diet to revise the Act on Standards for Class Formation and Fixed Number of School Personnel of Public Compulsory Education Schools to reduce class size to 35 students for all grades of elementary school. I understand that Prime Minister Suga said at a House of Representatives Budget Committee meeting that class size reduction for junior high school would also be considered. I earnestly request that class size will be reduced also at junior high and senior high schools. Thank you for your attention.