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Put emphasis on implementation of economic policies focusing on better jobs and stable living conditions

photo-Zenroren statement on Abe administration’s emergency economic package

January 13, 2013

ODAGAWA Yoshikazu

Secretary General

National Confederation of Trade Unions (Zenroren)

The government on January 11 approved a set of emergency economic measures ostensibly to revitalize the Japanese economy.

The package consists of three major policies: a fiscal policy with high mobility; a bold monetary policy; and a growth strategy. The government says these are essential for pulling the country out of an economy plagued by a strong yen and a deflationary trend.

One of its main features is a massive spending of more than 20 trillion yen (215 billion US dollars), including costs covered by local government and the private sector. About 10 trillion yen (107 billion US dollars) out of this will be secured by a supplementary budget for fiscal 2012 (ending on March 31, 2013). To this end, the government will newly issue construction bonds for 5.2 trillion yen.

The package will pressure the Bank of Japan to make a firmer commitment to pump more money into the economy by setting a clear inflation target. Such a monetary policy amounts to overriding the central bank’s decision making.

The package says that its growth strategy is aimed at turning Japan into the most corporate-friendly country in the world by carrying out “bold regulatory reforms” mainly in environment-related business and healthcare services.

These three policies are no different than supply-side measures that were adopted as part of the “structural reform” policies carried out under Prime Minister KOIZUMI Jun’ichiro’s administration since the early 2000s. Given the fact that the “structural reform” policies have forced workers to endure hardships, Zenroren rejects the Abe administration’s emergency package. We demand that the package be reviewed.

The package says the 10.3 trillion yen budget will include 3.8 trillion yen to be used for post-disaster reconstruction and disaster prevention, and 1.8 trillion yen for public works projects that would encourage private sector investments. It also makes clear that roadside power poles will be removed and that parks will be built and urban rail transit systems would be improved. All these are ostensibly for the purpose of “revitalizing local communities.” In sum, huge amounts of tax money would be used for development projects that are not important but are made to keep the money busy.

On the other hand, only 300 billion yen will be provided to help develop human resources or help people find jobs. What’s more, the money would be directed to helping firms in job training for casual workers and other ineffective programs.

It is pointed out that some firms that are on contracts for the removal of radioactive waste caused by the Fukushima Daiichi nuclear disaster are getting a rake-off from the workers. This is an example of how dubious firms are exploiting public works projects. Providing support to firms without rectifying such unfair employment practices will not benefit workers.

Japan’s monetary policy has left interest rates near zero since 1999. As a result, companies have abundant cash-in-hand, but the money is not being used to increase workers’ wages, to improve working conditions, or to invest in what the public needs. Unless this way of using tax money is changed, monetary policy could only end up in supplying funds for money games that cause hardships to workers and the general public.

If an economic policy is to help to end the deflation, it must be one of stopping massive dismissals being carried out by electronics and other industries under the name of corporate “restructuring” effort; it must implement measures to help increase the minimum wage to 1,000 yen or more per hour at small- and medium-sized business establishments. We demand that the business sector and large corporations give a substantial wage increase and promote casual workers to regular full-time positions. We also demand public contract legislation to strictly eliminate expenditures for wasteful public works projects and prohibit employers from getting a rake-off from workers, as measures to recover the functions of wealth redistribution.

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