Business / Economy

Systematic cover-up? Labor ministry says officials knew of improper wage surveys for over a decade

Kyodo

The labor ministry said Friday its officials have been aware of an improper method used for wage surveys for more than a decade, raising the possibility of a systematic cover-up.

The fresh revelation could deal a blow to Prime Minister Shinzo Abe’s administration, which is already under fire for another data scandal involving the ministry.

The Health, Labor and Welfare Ministry admitted that regional branch officials were supposed to visit companies in person for the wage structure survey but that in most cases, they sent questionnaires by mail.

Earlier in the day, labor minister Takumi Nemoto dismissed a senior official in charge of the survey for not reporting the discovery of the practice — dating back to 2006 — to the Internal Affairs and Communications Ministry, which oversees statistics at all governmental ministries and agencies.

The announcement casts doubt on the accuracy of government statistics as a whole, prompting the internal affairs ministry to order other governmental organizations to launch full-scale investigations.

Abe said Friday the government is considering revising data on workers’ wages in response to growing criticism of the labor ministry’s faulty statistics.

The revision, according to sources close to the matter, will lead the government to acknowledge that, from a year earlier, real wages dropped on average around 0.5 percent for the 11 months through November, dealing a serious blow to Abe, who has touted salary increases as a major benefit of his Abenomics economic policy mix.

The ministry has only released recalculated figures on nominal wage changes, suggesting salaries continued growing during the 11-month period. But now it is also set to present figures on real, or inflation-adjusted, wages to the Diet next week, the sources said.

The Health, Labor and Welfare Ministry “is examining whether it is possible to calculate” real wage data to reflect actual conditions, Abe told an Upper House plenary session.

Opposition parties are stepping up their offensive against the Abe administration, claiming the ministry released faulty data to make Abenomics appear more successful.

Specifically, the opposition is demanding the resignation of Nemoto for his oversight over the fiasco. But Abe has so far refused the opposition’s request to dismiss him.

“I want Minister Nemoto to continue to take a leading role in swiftly repaying the missing benefits, thoroughly investigating the case and preventing a recurrence,” Abe told a plenary session of the Lower House on Wednesday.

He made the comment in response to questions from Yukio Edano, who heads the opposition Constitutional Democratic Party of Japan, which along with other opposition parties is stepping up pressure on the Abe administration in the run-up to this summer’s Upper House elections.

During Wednesday’s session, Nemoto explained he first learned of the matter on Dec. 20 but said it was difficult to know at that stage whether it would have an impact on the draft budget.

Abe has maintained that workers’ incomes are actually on an upward trend, citing surveys conducted by the Japanese Trade Union Confederation, the nation’s largest labor organization, which is also known as Rengo.

The ministry admitted last month it had published faulty jobs data for more than a decade and failed to properly pay work-related benefits. As a result, it emerged the government failed to pay a total of more than ¥56 billion ($512 million) to more than 20 million people.

In the monthly labor survey, the ministry is required to gather results from all businesses in the country with 500 or more employees. But in Tokyo it had only surveyed a third of the roughly 1,400 such businesses since 2004.

In January 2018, the ministry quietly began tweaking the survey results to make it appear that it had collected the necessary data, leading to a sudden rise in wage figures.

In addition to the tweaks, the ministry replaced some of the workplaces covered in the survey from that month. As a result, it became impossible to compare figures released before December 2017 with those made public afterward.

Last week, a third-party investigative committee concluded that there was no definitive evidence that the incident was caused by a systematic cover-up.

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