The revelation that the Health, Labor and Welfare Ministry has been using improper methods to collect job and wage data for the past 15 years, thereby underpaying unemployment insurance and other benefits for nearly 20 million people by billions of yen, is yet another problem that threatens to undermine public trust in administrative service. Such data serve as key components of the government's economic estimates and forecasts, which are used to formulate policies. While the government plans to provide retroactive compensation for the underpaid benefits, it also needs to take steps to rebuild the credibility of its statistics.
The ministry's monthly labor survey covers jobs, wages and work-hour data on businesses establishments across the country, serving as a key indicator of the nation's employment conditions. While it is a rule to survey all companies that hire 500 or more employees, the ministry since 2004 has in fact collected data from only about one-third of the roughly 1,400 firms in Tokyo that meet the criteria. Since the survey resulted in excluding many of the big companies located in Tokyo where wages tend to be higher, the average wage quoted in the statistics was calculated lower than it would have been had the survey covered all relevant companies.
Because the amount of benefits paid in unemployment insurance and labor accident insurance programs is reviewed in accordance with the fluctuations in the average wage, the government says the faulty wage data resulted in underpaying benefits by ¥53.7 billion to a total of 19.73 million people over the past 15 years. While some 19 million were underpaid a total of some ¥28 billion in unemployment insurance benefits, roughly 720,000 others failed to receive some ¥24 billion in benefits under the labor accident insurance program that they could have gotten had the labor data been collected in accordance with the rule.