Abe faces tough sell on wage equality

Plan to raise wages of part-time workers opposed by business

For more than a year, Mr Yoshi has been working up to 40 hours a week in his job at a rental car company. But despite his long hours he is on a "part-time" contract and draws a wage lower than his full-time colleagues'.

The 34-year-old, who asked to be referred to by only one name to avoid issues with his employer, told The Straits Times: "There is nothing to be satisfied with at this point. I do not get benefits such as bonuses and I can only work hard with the hope that my pay will increase."

While he said that his situation is relatively better than his previous job as a security officer, he added: "It is difficult to make a living, let alone save for the future."

In a good month, he draws a salary of about 200,000 yen (S$2,700).

The plight of part-time workers - also known as "irregular" workers - like Mr Yoshi has come under the spotlight due to Prime Minister Shinzo Abe's election promise to achieve "equal pay for equal work".

Mr Abe has framed the Upper House polls tomorrow as a vote on his Abenomics policy, and this promise is a key plank to uplift the livelihoods of a segment of the workforce that has been increasing in numbers.

The main opposition Democratic Party said it will instead focus on raising the minimum wage to 1,000 yen per hour, up from the national average of 798 yen, and change the work culture to reduce overtime and boost productivity.

The number of temporary workers hit a record high, accounting for nearly 40 per cent of the workforce - or more than 20 million people, forming one-fifth of the electorate - last year. Some 70 per cent of these workers earn 2 million yen or less each year.

Irregular workers in Japan are typically paid about 60 per cent of the salary their full-time colleagues draw and they do not get perks such as annual bonuses or medical benefits.

Mr Abe has referred to the task of improving conditions for the irregular workforce as a "major challenge that urgently needs to be tackled".

By comparison, the ratio is 89 per cent in France and 79 per cent in Germany, according to data from Japan's Institute for Labour Policy and Training.

A government White Paper last month - Japan's Plan For Dynamic Engagement Of All Citizens - calls for "equal and balanced" treatment of regular and non-regular workers.

But economists who spoke to The Straits Times said the situation is pressing as many companies today tend to hire short-term staff, who are less expensive, to boost profit amid flagging consumer sentiment.

Thus, any attempt to raise wages will likely face staunch resistance from Japanese firms, as it will squeeze profits. Only 9 per cent of Japanese firms think Mr Abe's plan is realistic, said a Reuters survey.

Mizuho Research Institute senior economist Yutaka Okada said the plan will only be feasible with an overhaul of long-standing practices in the country's job market.

The temporary workforce includes mothers returning to the job market, and a flexible full-time working arrangement is still unheard of at most firms, said Mr Okada.

University of Tokyo economist Masayuki Otaki noted that the wage disparity between the two groups of workers is a reason Japan's productivity is suffering.

Given the drastic steps that need to be taken to ensure "equal work, equal pay", Mr Yoshi is sceptical that Mr Abe can fulfil his election promise. Opinion polls show his ruling coalition will secure a two-thirds majority in the Upper House.

A version of this article appeared in the print edition of The Straits Times on July 09, 2016, with the headline 'Abe faces tough sell on wage equality'. Print Edition | Subscribe