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Japanese workers get smaller share of cake

By Reuters | China Daily | Updated: 2015-03-06 07:20

Millions of Japanese workers are taking home their smallest share of corporate income in two decades as companies build record cash hoards and abstain from substantial wage raises seen by Prime Minister Shinzo Abe as critical to a durable economic recovery.

A seasonally adjusted estimate by the independent NLI Research Institute shows worker compensation fell as a percentage of corporate income in 2014 to the lowest level since 1991. By contrast, companies piled up 332 trillion yen ($2.75 trillion) in internal reserves as of the end of last year on the back of record profits while increasing the number of low-paid, non-regular jobs to curb fixed personnel costs.

Take-home pay as a share of company income has declined since Abe took office in late 2012 as profits grow while risk-averse employers resist his call to boost wages and end two decades of deflation. Japan ranked below the United States, Britain, France and Germany in payroll expenses as a ratio of gross domestic product as of April-June last year, according to calculations by Japan's Cabinet Office based on OECD statistics.

Japanese workers get smaller share of cake

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