Quarter of major companies back Abe’s merit-based wage system, survey shows


Almost a quarter of major domestic companies are considering adopting the government’s proposed merit-based pay system, a survey has found.

The survey of 100 companies showed 24 backed the so-called white-collar exemption system to pay workers based on achievement rather than work hours. They included Toyota Motor Corp., Takeda Pharmaceutical Co., Bank of Tokyo-Mitsubishi UFJ and NTT Data Corp.

By contrast, 28 companies said the introduction of the system was currently not an option. The remaining 48 were undecided or gave no response.

The government has proposed the system as a centerpiece of Prime Minister Shinzo Abe’s labor market reform initiative. It hopes a bill to revise the Labor Standards Law will be enacted by the June 24 end of the current Diet session.

But the survey, conducted by Jiji Press, suggests businesses remain slightly cautious about embracing the system.

The new system is expected to cover specialists, including those in research and development and financial markets, who earn at least ¥10.75 million annually. Many manufacturers and financial institutions are considering introducing the system, according to the survey.

Companies looking at the system also included Shiseido Co., Ricoh Co., Daiwa House Industry Co. and Mizuho Financial Group Inc., while Canon Inc. said it may consider it if the annual pay threshold is lowered.

Among businesses that ruled the system out as an immediate option were Nippon Steel & Sumitomo Metal Corp., NTT Docomo Inc., Nippon Life Insurance Co. and Nintendo Co.

Some companies pointed to the narrow scope of jobs to be covered.

Itochu Corp. said the types of occupations subject to the system are too limited. Nissan Motor Co. said only employees in managerial posts would exceed the income limit, and that it needed to analyze the extent of any positive impact from the system.

  • Jay Jardin

    This is very interesting. Introducing the ability to be a capitalist while being working class. I would love to see the outcome and wonder if they will miss their socialized paycheck.

  • Mic Justin

    One thing that I wonder about is how and who is the one who divides the work into parts and assigns parts. It is very hard to gauge the difficulty of high level tasks until the task is already complete.

  • Liars N. Fools

    If “one quarter” is in favor is this ringing endorsement or is it the sound of an idea with only minority resonance? Sounds like the latter to me. Another big advance for Abenomics?