Winter bonuses at major firms to fall a record 6.1%

The amount of six-month bonuses to be paid this winter by listed companies to employees will decline by a record 6.1 percent from the previous year, surpassing the 5.6 percent decline recorded in 1999, according to a survey of bonus package deals at 300 major companies in Japan.

The Institute of Labor Administration, a Tokyo-based think tank that undertook the study, said the result is based on pay packages agreed by labor and management during their annual round of pay negotiations in spring or separate pay talks this summer.

While some listed companies have yet to work out their winter bonus packages with unions, the Institute of Labor Administration predicts there will be little change in the overall picture, citing stock prices that remain weak and business uncertainties.

According to the study, winter bonuses that have so far been agreed upon by management and labor will decline by 43,000 yen from the previous year to 660,000 yen, on average.

The institute says the decline is particularly prominent in the nation’s core industries, such as steel and electrical appliances.

Topping the list in terms of the margin of decline is the construction industry, where winter bonuses will decline 16.6 percent from the previous year to 519,000 yen, followed by steel manufacturing, down 13.4 percent to 507,000 yen, and electric appliances, down 12.4 percent to 621,000 yen.

Only four business sectors — shipbuilding, automobiles, pharmaceuticals and private railways — will pay higher winter bonuses this year.

Reflecting a sharp turnaround in business, major shipbuilding companies will raise their winter bonus payments by 8.6 percent to 681,000 yen on average.

The Institute of Labor Administration said the study is based on data provided by the labor unions of 306 companies listed on the first section of the Tokyo Stock Exchange. The institute sent questionnaires to 550 companies with unions affiliated to industry-wide labor federations.