The Berlitz and ECC branches of the General Union recently issued their annual demands to their respective employers. Among other things, both branches have demanded percentage-based pay raises for members across the board – and that is no coincidence!
In early December 2021, the ruling coalition of the Japanese government issued an outline of the 2022 tax reforms. This is part of Prime Minister Kishida’s push for a “new capitalism” intended to create a “post-Covid-19 society” premised on equitable distribution of profits and the “virtuous cycle” of corporate growth -> employee growth -> consumer growth -> corporate growth, etc.
Among a slew of new rules, revisions, and incentives, one offers large employers who grant permanent wage hikes of at least 3% to all employees a 15% tax credit on their annual income taxes.
This credit can jump up to 25% for employers who grant a wage hike of at least 4%. (an additional 5% credit is granted for large employers who increase their education and training expenses by 20% as well).
Following this outline release, unionized teachers at Berlitz and ECC demanded pay raises of 3% and 4% respectively. Whether more unionized workers within the General Union will make similar demands remains to be seen, but union liaisons and branch leaders are keeping their ears to the ground on the issue.
Stagnant industry wages, the current inflation situation, and the 2019 consumption tax hike all combined to put more pressure on the shoulders of workers in Japan. Workers having literally risked their lives to keep their companies open during the pandemic now demand to be rewarded, and at the minimum not to lose ground.
An unnamed ECC Branch member put it this way: “the students are here for the excellent service and lessons provided by us, but we’re being priced out of our ability to even live here.”
Whether or not government incentives are enough to compel companies to insert more of their earnings into Kishida’s “virtuous cycle” plan remains to be seen. According to a mid-November poll by Teikoku Databank Ltd., 48.6% of companies said that they planned to raise wages regardless of new tax breaks, while only 8.5% said that they would increase wages as a response to these new tax breaks. 22.3% of polled companies said they will “consider” a wage hike. We need to make strong demands in the language industry to make sure our employers are part of those companies raising wages.
Several economists are skeptical that the ambitious-sounding plan will be enough to propel Japan into a “new capitalism.” Previous rules offered similar but smaller tax breaks to companies who increased the wages of newly-employed workers, but did not have impressive results.
Ultimately, while the government may perceive the economic contradictions placing Japan under strain, it appears that organized workers still have a big part to play in making the economy more fair for more people. Unionized teachers in the General Union are taking a step forward in that process, and we sincerely hope readers join us in this movement.