Firms resist government pressure to lift base wages

This has been going on in the US for the last few years. Corporate profits at an all time high and two trillion dollars sitting on the sidelines. Yet hiring is at a minimum. And if an employee leaves everyone else has to pick up the slack. It's a worrisome trend of squeezing workers and the question is: When will it end?

I feel deep sympathy for the poorest workers in Japan - the single parents, the elderly, the blue collar workers, construction, driving, etc.

They are already struggling to survive on their meagre salaries, I hope that this does not push them over the edge. To their company, its just a few yen. But to these people its the choice between food or heating. I very much hope Abe will introduce some kind of salary top up, for the people who need it most. But I highly doubt it.

"Without profits companies go bankrupt and employees lose their jobs."

Um, that's obvious, although it misses the point. Companies used to be able to succeed at much narrower profit margins and still give raises to their employees.

What's gone wrong? The answer right-wing trickle-down economic policies ("voodoo economics") combined with globalization. That's a lethal combination for the 99%, um, us.. So prepare yourself for a bleaker future.

"What do you call it when a government orders across-the-board wage increases or hiring/firing freezes?"

Nixonomics? Nixon also imposed wage and price controls, in the early 70s. That's what conservatives usually do after the they totally screw up the economy.

Duuhhh.........Stevie Wonder could have saw that coming!

Is anyone surprised by this news? あたりまえ。

Another arrow in Abe's foot.

Companies will not raise wages until after they see the effects of the consumption tax hike. If the tax hike knocks the country into recession like the last one did, more than a few companies will be closing their doors for good.

For those who aren't aware, most companies in Japan sell mainly to the domestic market, which is shrinking quickly. They have a hard time seeing the logic of raising wages when their businesses are in steady decline. The larger exporting companies are seeing sales improve, but much of their operations are outside Japan, so any wage increases have litte effect here. And with the world's economic "recovery" being fueled mainly by government "stimulus" spending and further increases of already staggering national debts, there is more than a small possibility of further economic collapse. Therefore, those companis which can are accumulating cash to weather future economic disasters, and to keep and pay as many of their staff as possible.

Abe cannot expect comanies to be optimistic and increase wages when he cannot keep his own financial house in order. Fat chance of that ever happening. The problem with having the government run by geriatric old fossils is that they'll have died of old age when the rest of us have to pay for the resckless spending spree they have been enjoying. Too bad we can't have younger people with children running things, tney might be more reluctanct to sell off their children's future for their own personal gain.

Western countries companies must be so envious of Japanese workers who year after year happily for the company receive no wage rises.

It's a stark sign that the cost of living will go up, and the Japanese people will have to learn to live with less for more. Spend less, save more, give up conspicuous consumerism and re-focus priorities. Social engineering has its costs.

Hey, profits come first!

If all companies pay workers as much as they can, then workers buy lots of their products and they get the money back anyway. Thisi s "Fordism", which made the US rich from the 1920s. Until the 1980s, when "stockholder priority" became all the rage. Workers are paid next to nothing, jobs are sent overseas for cheap labor, but profits go up and stockholders are happy. Of course, since the US is dying, this party will not last much longer. Will Japan go the same way?

paulinusa, to some degree you answered your own question. So long as companies can scape back on personnel costs and keep make more profit without giving wage hikes, then they will continue to do so. There is plenty more room for that to happen.

What you have to realise is that this is a game. Government recommendations to raise wages are put out there with a wink and a nod, and a representative is sent to Keidanren to assure them this is all just politics.

What aggravates me is that companies say they can't hire or raise wages because of "uncertainty" about the future ( the same as these Japanese corporations claim in these article: "uncertain economic outlook"). So when is there ever certainty about anything? I'm afraid they will continue to use this lame excuse for years.

" What's gone wrong? The answer right-wing trickle-down economic policies ("voodoo economics") combined with globalization. "

Squirrel! What's gone wrong, and has always is increased government intervention, which you advocate. You should know I'd be the last to defend Nixonomics.

Companies have become increasingly more saddled with social program edicts which have choked out the ability to adapt to market fluctuations which are exacerbated by more regulatory meddling.

"What's gone wrong, and has always is increased government intervention,...'

@Jean: Minimum wage, health care, job security, pensions, etc. have been declining for years. So how is all that "government intervention" working out for everybody?

Another arrow in Abe's foot.

That maybe a good thing, will prevent him from inserting it into his mouth, like the other jackasses he has around him

Guess what? Profits DO come first. Without profits companies go bankrupt and employees lose their jobs. Do companies ONLY about profits? Perhaps some do, but most are concerned about their long-term viability.

What do you call it when a government orders across-the-board wage increases or hiring/firing freezes? Well, what Abe is indirectly attempting is not to directly control the means of production but to directly influence it via populism. Perhaps it's a lead-up to his own " Directive 10-289".

Abenomics ＝ Failure

The government need to decide what they want vs what Japan needs. They can raise tax, and companies can refuse to raise salaries, however its not going to raise the birthrate. At the moment that is a bigger issue than how much tax we pay in the supermarket.

"Government pressure to lift wages" Basically sounds to me like they are saying "Raise your staffs wages please?" And the companies are saying "No thank you." Bloody well grow some balls Abe - There is no real pressure here - DEMAND they raise wages by 3%, or they will be fined double the amount they would have had to pay in wages. Make it law. Don't ask them to, tell them they have to. And raise the minimum wage while you are at it.

Generally people don't have babies when they are struggling to live. A married couple who both have to work, are very unlikely to have more than 1 child, if any at all. The old boys club are thinking very short term indeed. Wish I could bang their heads together.

DEMAND they raise wages by 3%, or they will be fined double the amount they would have had to pay in wages. Make it law. Don't ask them to, tell them they have to.

Ignoring the fact that he would be pulled as PM before that could ever happen, you can't legislate raises. The best you can do is legislate a minimum wage. But the company salaries this article refers to are all already well above minimum wage.

The best time for workers to go on country-wide strike in now; especially those in strategic industries. The government insists on raising the sales tax. The companies are refusing to increase pay and bonuses despite huge currency exchange profits. Workers have become no more than slaves working just to survive the hand-outs from the aristocracy ( politicians, the rich and wealthy, corporations and land-owners ). Time for the past 20 years and more of serfdom to end.

Yes, "trickle-down economics". I think "tinkle down -- tinkle tinkle tinkle", the sound of urine hitting our heads. That is the right expression.

Japanese companies tend to be quite cheap, which is why I never worked for one. I found the gaishikei to be much more generous in terms of what they paid.

" Minimum wage, health care, job security, pensions, etc. have been declining for years."

Of course you can back that up with data, right?

Here's the data for minimum wages:

http://www.mhlw.go.jp/stf/seisakunitsuite/bunya/koyou_roudou/roudoukijun/minimumichiran/index.html

I didn't know job security was controlled by government.

I would make some of the tax breaks contingent on their hiring/ giving raises to employees. Corporations enjoy government spending (of taxpayer money) so time to give something back to the people.

such crap.

You need to be working for a major company, 90% of Japanese people DO NOT, I have never gotten a bonus ever and don't expect my pay to increase. Abe is the death of Japan.

And yet these same companies pressure the government for tax breaks all the time and get them almost right away. Ah, good old Abenomics! Going to be the failure of this nation, and we'll start to see that come April.