Part-timers skewing employment statistics

January 2nd, 2014 by Philip Brasor & Masako Tsubuku

Take this job and...: Want ads targeting part-timers for specific shifts at a Chiba Prefecture supermarket

Take this job and…: Want ads targeting part-timers for specific shifts at a Chiba Prefecture supermarket

When the government determines the success of Abenomics it has to take into consideration wage inflation, not just price inflation, since real growth can’t be sustained without both. Nevertheless, all wage inflation isn’t created equal.

A recent article in the Asahi Shimbun cited results of a regular survey conducted by Recruit Jobs, an employment-related research institute. In the major metropolitan areas of Japan the average wage offered to part-time food service workers in want ads in November was ¥930, which is 1.3 percent higher than the average amount offered in November 2012. More significantly, this year-on-year increase has been continuing for 25 consecutive months, the longest stretch of increases since the institute started tracking such numbers in 2007.

The standard wage in the restaurant industry is relatively low to begin with, and right now there is a shortage of help nationwide, so Recruit says employers are being forced to offer more money. One example cited by Asahi is a new mall that just opened in Makuhari, Chiba Prefecture, which contains a number of eating establishments, most of which belong to chain operations. Starting wages at these restaurants is between ¥1,200 and ¥1,300 an hour, which is even higher than they are in Tokyo. According to an official at Four Seeds, a company that owns several restaurant chains, more large retail facilities, such as shopping malls, are being built in an around major metropolitan areas, so there is greater demand for food service workers.

However, these numbers are misleading in terms of indicating whether or not the economy as a whole is on the mend. For one thing, the labor ministry says that just because part-time wages in major cities are going up, it doesn’t mean they’re rising for the rest of Japan.

The ministry found that in October, the average monthly take-home for “short-hour part-timers” was ¥94,634, which is 0.4 percent lower than it was in October 2012, and marked five straight months of year-on-year declines. And if the average pay for a part-timer in this industry in 2010 was set at 100, then the salary this year is 98.7.

Despite the fact that the national minimum wage was raised recently, average part-time income is dropping, mainly because companies are hiring more people to work short hours. For instance, the coffee shop chain Pronto targets housewives (which they call “mistresses”) in their 30s and 40s with the promise that they don’t have to work weekends and holidays. In addition, they can take off up to nine full weeks, without pay, of course, in a given six-month period. These women don’t work more than 20 hours a week, and the company likes it because under these conditions they can easily find women willing to work for low pay at short notice.

This trend is also prevalent in the supermarket industry, where employers pay housewives slightly more to work in the morning and the evenings since most housewives prefer only working in the afternoon when they don’t have household responsibilities.

In Tokyo, many food service companies offer higher wages only for peak demand periods to fill short-term staffing shortages. Other times they offer less money. The turnover is high, but this strategy allows the companies more options in controlling personnel costs on a month-to-month basis.

The point is that these workers supposedly want to work shorter hours, and the more people there are working shorter hours for slightly more pay, the more the statistics will reflect higher wages overall, but in truth the pay is just being distributed among more people, meaning per capita wages aren’t going up at all.

Of course, food services is traditionally considered an entry-level or temporary job, not a career track job, but as manufacturing continues to shift overseas, it is an industry that will become more vital as an employer. It’s not quite at the stage that it is in the U.S., where many fast food workers have to support families on what they make, but it might be getting there.

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One Response

  1. “and right now there is a shortage of help nationwide”

    hmm, that corresponds with my “depopulation thesis”, yeay.

    I posted this graph in the previous comment section, let me re-work it here:

    http://research.stlouisfed.org/fred2/graph/?g=qx6

    blue is total population, red is age 15-24 (right axis)

    so since 1990 total population has been level at ~125M, while age 15-24 cohort has fallen almost 40%, from 19M to 12M!

    This is kinda good if you’re young, maybe. Less competition for college spots, less competition for jobs starting out.

    (Assuming the overall economy doesn’t implode with the ongoing decline of young people!)

    The crazy thing is that Japanese real estate is still colossally expensive, and yet the current cost of production of all land and building is approximately zero. With the falling demographics, Japan doesn’t have to build another road, power-line, or building, just maintain what’s done been built, until decommissioning time comes this century or next.

    Anyhoo, if imports go up and take-home wages do not, there’s still juice to be squeezed out of rents and land values. These are set at what bidders can afford.

    The “take-home” part in the above is important. If & when the MOF decides it’s time to raise taxes on wage earners to start retiring Japan’s ¥1.1e15 debt, everyone’s going to not be able to afford so much going out for the rent, or kami-forbid, mortgage.

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