A look inside Japan’s city halls and what they cost to run every year

Within the last ten years or so, three new local (municipal) city halls were rebuilt in the area I currently call “home”, two five stories in height and the third building the tallest, six stories high with a four story annex building. The largest of the three city halls wasn’t actually constructed new, it was completely rebuilt with an extension added on that is seven stories high. This local shiakushyo (city hall) where I live employs between 300 and 400 public servants (they serve themselves) I guess. I actually walked through the building from floor-to-floor and estimated how many public employees were on each floor.

Most of the public employees when I observed them while walking freely through the new building, were shuffling papers on their desks, working on computers, walking back and forth between offices and desks, and assisting people, mostly the elderly, at different desks. “We want your taxes counter” had the most people at it. They were either waiting in line at the counter, or sitting with their numbered tickets wasting their time and productive energy for their turn. So as I am walking around this new public taxpayer funded city hall, I started wondering about the number of public “servants” at this city hall and their salaries, while the big Toshiba manufacturing plant down the street with 6,000 employees is due to close next year.

Japan city hallsJapan implemented Quantitative Easing (QE) in 2001 recently announcing the Bank of Japan is “out of ammo”, while in 2017 this Toshiba plant is closing putting 6,000 Toshiba employees out of work. I guess the BoJ’s QE policy didn’t work out too well for Toshiba did it? That was the purpose of QE right? To increase manufacturing in Japan? So there are three new modern city halls constructed each six stories tall with modern security systems, glass walkways, coffee shops, large spacious offices all equipped with up-to-date computer systems and break rooms. And Toshiba shuts down a large production facility employing 6,000 Japanese? The city hall I visited I guessed had between 300 and 400 employees working there from Pay Grades 1 through 10. The Japanese government has a pay scale for public employees from Pay Grades 1 through 10. The average salary is around ¥400,000 with two bonuses (“diligence allowances”) a year for Pay Grades 7 and up which is about 4 months salary for a total of ¥2 million a year in bonuses. For grades 9 and 10 these salaries are over ¥500,000 per month. It is extremely competitive to get into these public servant jobs in Japan and there are vocational schools set up to train people wanting to go to work in one of the many city halls that decorate Japan with cities with the suffix shi attached to it.

Once employed as a public servant it’s almost guaranteed life time employment as a government employee, but it doesn’t go without related psychological stress. Ijime (work bullying and aggressiveness) takes its toll on government employees in the many city halls where they come to work Monday to Friday starting work at 8:30am and finishing “work” at 5:00pm for forty years. These city halls must be a cauldron of crushing monotony where creativity is quashed. The other thing that came to mind while walking through this city hall, was the politician Ryutaro Nonomura who was suspected of using tax money for personal expenses, and when he was exposed he cried on national television. I think he was used as a political tool to demonstrate to the Japanese that yes, we are doing everything we can to prevent tax money from being used for personal expenses.

Japan public servant payThese city employees also receive family allowance, housing allowance, commuter allowance, Family Unattended Transfer Allowance, overtime allowance, managerial allowance, special holiday work allowance, hardship duty allowance, headquarters duty allowance and research activities incentive allowance. Is it any wonder it is extremely competitive to get into a system that takes care of government employees so well? Is there a pay off though? What do employees at city offices actually do that is any real value other than as a central location for accounting, data and record storage? At the city hall close to here, I used the average salary of ¥350,000 and came up with total salaries paid for the 300 employees at this city hall at ¥105,000,000 (US$905,000) every month. Granted, there are Grades from 1 to 10 employed at this one city hall, so I just took an average that’s all.  It could be much more or even much less.

Then factor in all the bonuses and the consumption of electric, water and gas utilities, then full pensions at this city hall and this one operation is sucking up an enormous amount of tax money every year. Japan’s public employee pension funds are invested in bonds (slashed from 75% to 35% in 2015), 25 percent is invested in stocks in Japan, and is currently investing in foreign stock. The Federation of National Public Service Personnel Mutual Aid Associations, also known as KKR, sits on the nest eggs of the national government and postal service employees, which had 7.6 trillion yen (about $73.9 billion in 2014) in assets under management as of March, 2014. Its new asset allocations will “mirror those of Japan’s 130 trillion yen Government Pension Investment Fund”, which manages the public pensions of company employees and the basic national pension. One of the biggest in the world. Is it any wonder these employees never quit and why so many Japanese want to work in public service?