It is not appropriate to judge the success or failure of an economic policy by taking only segments of data collected through wage and income surveys. Both the ruling and opposition parties should discuss the basic condition of the economy on the basis of various barometers.
In the aftermath of the controversy over the use of improperly collected data for reports on monthly labor surveys, the rates of wage increases have become a contentious point in the Diet.
Figures on real wages per capita in 2018, released by the Health, Labor and Welfare Ministry, showed an increase of 0.2 percent over the previous year. An opposition party claims that real wage growth per capita would have registered as below zero if it had been based on comparing only the data from business establishments that were surveyed in both 2017 and 2018.
Per capita wages are being held down primarily due to increases in the number of elderly workers and female part-time workers, both of whose pay levels are low. Now that the number of people employed has been increasing, might not there be many cases in which incomes have grown, when gauged on a per household basis?
Opposition parties' criticism that "Abenomics has failed" -- based on their own selective view of labor statistics data -- can be considered too one-sided.
A survey that keeps its sample of business establishments unchanged from year to year is suited for assessing changing trends in wages, but only a few business establishments are subject to this new survey method. Accuracy is also limited by a lack of accumulated data, as the labor ministry has only recently started using this method for the survey.
Look to sustain growth
At the House of Representatives Budget Committee meeting, Labor Minister Takumi Nemoto made clear that he has formulated a policy of establishing a new organization to consider how the relevant statistics should be made public. Wouldn't it be worth the ministry's consideration to also make public those indicators that are collected from the same business establishments from year to year, while taking experts' knowledge into account?
The government attaches importance to the fact that the wage income of employees, which indicates the income trend for Japan as a whole, has been in positive figures both in nominal and real terms. Employee salaries and bonuses, shown on the basis of the Financial Statements Statistics of Coorporations by Industry, have also increased from the corresponding periods in the previous year, indicating that wages continue rising.
According to the Flow of Funds Accounts Statistics of the Bank of Japan, which shows the capital flow of Japan as a whole, household financial assets and household savings each posted a year-on-year increase of about 2 percent as of the end of September last year. The government's explanation, that the economy continues recovering moderately, is convincing.
The important thing is whether the government, while overlooking the economic situation, can implement effective measures that would sustain growth in spite of a declining working-age population. It is also essential to make efforts to link the brisk performance by companies to solid wage increases.
In order for the government to win trust in its economic measures, it must, first of all, find out the cause of the inappropriate statistical surveys, and strive to work out thorough measures to prevent similar incidents from occurring.
The duties of the legislative branch of government lie in analyzing relevant barometers level-headedly and presenting appropriate prescriptions to deal with tasks. It is also necessary to develop an environment toward smooth implementation of the planned hike of the consumption tax rate and to discuss ways to put the fiscal house in order.
Toward the goal of restoring trust in the government's statistical surveys, the ruling and opposition parties need to cooperate.
(From The Yomiuri Shimbun, Feb. 14, 2019)
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