“Densan Wage System,” which is said to be typical of the living wage system, has been highly evaluated as the starting point for seniority wages in postwar Japan. However, Densan Wage System is a coexisting type system of a guaranteed living wage and “payment based on ability.” In other words, it was a wage system conceived to utilize “payment based on ability” from the beginning. It seems that the conventional view that the Densan Wage System is typical of the living wage system has been established only by the average composition ratio of the living wage, etc., which accounts for about 80% of the monthly payment.
Based on the empirical study and analysis, while focusing on the importance of “payment based on ability” in the Densan Wage System, this paper clarifies that “payment based on ability” had a sufficient function to stimulate workersʼ wages, motivate workersʼ promotion. It is “payment based on ability” that decides the character of the Densan Wage System. With the view from labor relations, I would like to emphasize that the living wage system is not appropriate as a decisive factor in Densan Wage System.
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