2024年度の活動/Activities in 2024

ICOSA黒瀬理事長が『商工ジャーナル2024年11月号・観天望気』に寄稿しました。

ICOSA President Dr. Kurose contributed an article to the November 2024 issue of the Commerce and Industry Journal: "What holds back wage increases for SMEs."

Securing wage funds for SMEs by passing on costs to prices has become an important issue. The Japan Fair Trade Commission has created guidelines for price negotiations to support price transfers.

Labor unions have also stepped up their activities for this purpose. In this spring's labor offensive, the machinery and metal industry labor union "JAM (Japanese Association of Metal, Machinery, and Manufacturing Workers)" requested that management promote price increase negotiations with clients in order to secure funds for wage increases, and has taken actions such as sharing information on price pass-on between labor and management. It is a labor-management joint struggle for wage increases. JAM fought well, and its affiliated SME unions achieved a 4.19% wage increase, the highest since its formation in 1999.

However, the unionization rate in SMEs is less than 1%. According to a survey by the Ministry of Health, Labor and Welfare, the wage increase rate for SMEs as a whole (year-on-year as of June) was only 2.3%. This is still the highest ever. On the other hand, according to a survey by the Japan Business Federation (Keidanren), which has many large companies as members, the wage increase rate for this spring's labor offensive was 5.58%, far exceeding that of SMEs, and the wage gap between large and small enterprises has widened again, as it did last year.

For SMEs, wage increases alone are not enough. SMEs have not even been able to raise wages, let alone base pay increases, and the wage gap with large enterprises has been widening for a long time. It is necessary to eliminate the absurdity of being forced to pay lower wages than large enterprises despite doing the same work.

The reason why wage increases for SMEs are insufficient is because of the difference in price formation power between SMEs and large enterprises. There is a "price transfer power index" developed by the Small and Medium Enterprise Agency. It is a numerical value that quantifies the extent to which the increase in purchase price can be transferred to the sales price (= price transfer power) based on the rate of increase in sales price and the rate of increase in purchase price. If it is positive, it means that the sales price has been raised by more than the rate of increase in purchase price. It is a kind of piggybacking price increase, but it increases added value, and if the labor distribution rate does not change, the wage fund will also increase.

If it is negative, the opposite is true. According to the 2023 White Paper on SMEs, in the manufacturing industry, the price pass-through ability index for large companies in 2016-18 and 2019-21 was 1.3% and 0.9%, respectively, while for SMEs it was minus 2.1% and minus 2.3%. The positive index for large companies and the negative index for SMEs also apply to most of the previous period. This means that the following is happening:

Large companies pass on the import price to product prices at a rate higher than the rate of increase, increasing added value. SMEs that purchase it as raw materials can only pass on the price at a rate lower than the rate of increase in raw material prices, reducing added value. This means that value has been transferred from SMEs to large enterprises.

The following also happens: Consumers buy large enterprise products whose purchase prices have been over-passed on. Consumers with limited income buy SME products at low prices. SMEs under-pass on the purchase price. This means that value is transferred from SMEs to large enterprises via consumers.

The White Paper also indicates the important point that the real productivity growth rate of SMEs has been higher than that of large enterprises for most of the time, and that SMEs are by no means inefficient. Despite this, the wage disparity between the scale of SMEs is widening as large enterprises exploit SMEs due to the difference in price formation power. The joint struggle for wage increases between labor and management of SMEs is a countermeasure to this "exploitation problem," but it is still not enough.