The Ministry of Health, Labor and Welfare compiled labor statistics using inappropriate methods for years and failed to pay some 56.7 billion yen in unemployment insurance and workers' compensation to nearly 20 million people.
The ministry's Monthly Labor Survey is one of Japan's "Fundamental Statistics" based on the Statistics Act, and its results are used to calculate the gross domestic product. A thorough investigation is needed to find out why such a problem occurred with statistics used as the basis for important policies.
The government intends to compensate entitled recipients for the shortfalls, which date back to 2004, by reworking the fiscal 2019 draft budget. It will directly inform those whose addresses are available about the problem, but the whereabouts of many underpaid people is likely unknown. Confirming the recipients' addresses and adjusting computer systems will incur big costs.
The monthly poll shows worker salaries, working hours and employment trends, and covers around 33,000 employers with five or more workers across the nation. Labor ministry rules stipulate that all companies with 500 or more employees must be covered, but in Tokyo, only 491 of 1,464 such employers have been surveyed since 2004.
Survey results should have undergone statistical adjustments, roughly tripling the number of employers to get the right results, but ministry officials in charge failed to conduct the work. As a result, the data of large corporations in the capital with high pay levels were excluded, and the average salary levels came out lower than they should.
The average salary levels included in the survey are the basis for determining unemployment insurance levels. The inappropriate survey methods, therefore, caused benefit payment shortfalls.
The ministry, however, did not announce the problem even after an internal investigation revealed it and adjustments were made to survey methods in January 2018. This means that the ministry was slow to make up for the payment shortfalls, and continued to publish inconsistent data. The labor ministry bears grave responsibility for damaging the public's trust in the reliability of government statistics.
Labor minister Takumi Nemoto acknowledged at a press conference on Jan. 11 that his ministry made the decision to limit the number of companies subject to the labor survey. However, it is not clear why the data were not adjusted statistically and why the practice was carried out for so many years.
Now the government will check all of its 56 fundamental surveys to see if they were conducted properly. The examination must be thorough to stamp out inappropriate data.
The Ministry of Health, Labor and Welfare has come under fire for repeated mistakes in its management of statistical surveys and records, including the sloppy maintenance of pension data and inappropriate analysis of discretionary working programs. The environment allowing these chaotic practices must be changed.