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Friday, March 9, 2012
The pay-cut bandwagon
Wage cuts for national public servants under a special law recently enacted will have repercussions in various areas. The law, jointly written by lawmakers of the Democratic Party of Japan, the Liberal Democratic Party and Komeito, was enacted by the Upper House on Feb. 29. The wages will be cut by an average 7.8 percent for two years — in fiscal 2012 and 2013.
They will also be cut by an additional 0.23 percent on average retroactively from April 2011 — a rate adopted in accordance with the National Personnel Authorities' recommendation made in September 2011. The wage cuts will save some ¥580 billion during the two-year period and the savings will be used for the March 11, 2011, disasters reconstruction.
The law means that the government will cut the wages much deeper than called for by the NPA. It is certain that a labor union of national public servants will file a lawsuit, arguing that the wage cuts violate the Constitution. As public servants serve all of the people, they are deprived of the right to carry out a strike and to conclude an agreement with their management on wages and other conditions. The Supreme Court has accepted this condition on the grounds that the NPA's recommendation for national public servants' wage levels serves as a compensatory measure for their lack of basic labor rights. The lawsuit will force the judiciary to show its legal position on the deeper wage cuts.
The cuts in wages may lower the morale of national public servants and discourage young people who thought of pursuing a career in central government organizations. The lawmakers must contemplate how to attract talented people to work in the central government and give consideration to reviewing of the current policy on basic labor rights for national public servants.
The nation's local governments have cut their workers' wages by about ¥2 trillion in total in the past decade. Even so, the central government's move may put pressure on some local governments.
The DPJ government treats the wage cuts for central government workers as a quid pro quo for the people's accepting of the planned consumption tax raise.
As part of such a quid pro quo, the DPJ proposed Tuesday cutting Diet members' annual pay by ¥3 million or about 14 percent. The DPJ should not ignore opinions of small parties because pay cuts may hamper lawmakers' activities.