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Gov't pressures companies to raise wages

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I think they are deaf to Abe's requests, they know he can't force them to raise the wages. But prices are still rising, just ask the housewives, they're the savvy one's.

4 ( +5 / -1 )

My saying.

And how can he force companies to raise wages?

Use "thumb-screws"???

2 ( +4 / -2 )

Seriously, how is this different than the last three times there has been an article on the subject?

Abe says "please."

Companies say "no."

2 ( +4 / -2 )

Abe said he aimed to achieve economic revival, fiscal consolidation and social security reform simultaneously.

Like watching a kindergarten student trying to design a jet airplane. That statement alone is evidence that Shinzo Abe doesn't have a clue what he is talking about or doing. "Fiscal consolidation" is by definition the government taking more money out of the economy through taxation while injecting less through spending. Good luck with getting your economic revival and "virtuous cycle" to happen while you're trashing the economy due to your total ignorance of how things actually work.

3 ( +6 / -3 )

This kind of article had been written at least once before, you would think he would have got the message now. It's not gonna happen but just keep on asking, at least he can say he tried right? Pathetic....

0 ( +3 / -3 )

In a sign that Abe’s stimulus policies have gained some traction, a Reuters poll showed last month 42% of firms plan to raise wages at least as much as last year. Still, many are cautious with 44% undecided.

So 42% of companies polled are going to raise wages, seems that is a far cry from none. if you work for one of those crappy companies who wont raise wages then change jobs,

-3 ( +5 / -8 )

How many times have there been articles about Abe talking about "forcing" companies to raise wages? He even discussed publishing a list of businesses that refused his appeals.

He is learning the hard way that just because he wishes something to occur it does not equal reality.

How in the heck can companies that rely on imports for their businesses raise wages when the yen rate is falling and their costs are rising. They can not raise prices because folks just dont have the money, and in uncertain times it is a fact that Japanese consumers hold back on purchasing.

He talks a good game, and the folks that are in the export business are making a ton of cash and some businesses have raised the bonus payments but such a small percentage of people, in comparison to the total population, receive bonuses that it doesnt make for anything other than a few headlines.

I suggest that he start cutting government waste positions, government employees for the most part are a huge drag on the economy, they produce NOTHING and yet consume resources.

1 ( +4 / -3 )

Gov't pressures companies to raise wages

What will he do after he has realized that they are sitting on his request? Send them some Omiyage?

Again like I said in another related topic, he is just doing some PR propaganda to appear in the media so that he can show some appeal to a population who believes easily anything (you know the same who believed in Abenomics).

In reality he probably meets behind the doors the leaders of those companies and they laugh loud all together on the stupid face people are doing while they throw at them a considerable amount of BS.

-2 ( +4 / -6 )

How in the heck can companies that rely on imports for their businesses raise wages when the yen rate is falling and their costs are rising

How were these same companies who import goods getting on back in 2007 2008 when the yen was at 120?

The yen is around where it used to be for years and years but now suddenly you think business cant sustain it?

You think this is the first time the yen has been around these levels ?

-4 ( +2 / -6 )

Its partly up to the individual. Don't sign your contract unless it a better salary next time. Guessing nothings going to happen.

1 ( +1 / -0 )

"And how can he force companies to raise wages?"

He can threaten to withdraw their lucrative government subsidies and to review procurement contracts, suggesting more contracts should go to their foreign competitors.

-1 ( +2 / -3 )

Abe is living in dream land, if your policy is "make companies pay people more money" then your policy is crap because you are hoping on something you can't control.

4 ( +5 / -1 )

Abe expressed determination to have companies tap improved earnings for raising wages

He should instead focus his determination on improving the business environment in Japan asap, because it is only through an improved business environment that demand for labour, and therefore wages, would increase on a sustainable basis.

Asking companies year after year to do this is ridiculous. Japan needs a leader who understands how free market economies work.

Even under rosy growth assumptions, Cabinet Office estimates predict a primary deficit

So in reality where growth won't be so rosy, things will be worse than the optimistic projections. Japan really needs to get serious about this problem.

Guy_Jean_Dailleult,

Given that 35-40% of annual outlays are financed by issuing new debt, your suggestion that spending cuts are not part of the solution lacks persuasiveness. The fact is the government has been spending money like crazy for more than 15 years, and the economy is crap. So one thing is for certain - spending money like crazy for years on end has not produced a rock-star or even half-decent economy.

So let's try something different, rather than being insane and continuing the failed approach that has brought Japan to the mire it is in. Were the government to start to get itself in shape, by both slashing government spending (e.g. ending the misallocation of Japan's scarce resources) and by improving the free market economic environment, the boost to future confidence would be quite significant.

StormR,

So 42% of companies polled are going to raise wages

They are going to raise them "at least as much" as last year, however little that may be (zero, even?). The key point from the article was that real wages declined 2.5%.

But indeed, as you suggest people should change jobs if they want better wages. Labour should be mobile in a free market economy, this is something that the typical Japanese worker is going to have to get with the program on.

You think this is the first time the yen has been around these levels ?

Those exchange rate levels are nominal, not adjusted for inflation differentials. E.g. it's apples and oranges.

But interestingly this year the government clowns seem to be changing their tune on the yen, talking against further yen weakness. They must like it at about where it is, along similar thought lines to yours (e.g. pre-Lehman level is ideal). So in the short term at least the yen will probably be stable, if not appreciate somewhat. But mid-to-long term they can't pull the strings so easily and I think the yen will eventually continue it's decline.

JeffLee,

He can threaten to withdraw their lucrative government subsidies and to review procurement contracts, suggesting more contracts should go to their foreign competitors.

And that approach will work for how much of the economy? Let's be serious. The government cannot efficiently micro manage every single company in Japan like that, and if it were to try things would be worse, not better.

-1 ( +1 / -2 )

He can 'pressure' them all he likes, but until there is solid legislation and/or penalties for nonconformists they will continue to ignore his so-called, 'pressure'. Most companies got tax cuts of between 10-15 percent and were 'expected' to raise salaries by 5-10 percent. They have just stuffed the money in their company coffers and are screwing the employees to work more hours. Many companies have laid off large numbers of staff, but have given the responsibilities of the fired staff to the remaining staff. In other countries it is criminal, but in Japan to is business.

0 ( +2 / -2 )

The company I work for stubbornly continues to resist raising our salaries. The bosses must know something Abe doesn't...

1 ( +4 / -3 )

How many times have there been articles about Abe talking about "forcing" companies to raise wages? He even discussed publishing a list of businesses that refused his appeals

I quite agree with the above (a part of Yubaru's comment). Abe is just trying to give the public an impression that he is doing his best to improve the lives of people. His words, regarding this matter, have never been backed up by something concrete like a parliamentay bill that could force businesses to hike wages.

I suggest that he start cutting government waste positions, government employees for the most part are a huge drag on the economy, they produce NOTHING and yet consume resources

The above is the last part of Yubaru's comment. This is ridiculous. In my opinion most government employees do a fantastic job of running this country. Yubaru isn't really logical or objective about this thing. It looks like he seems to hold a personal grudge against them.

-1 ( +3 / -4 )

This is ridiculous. In my opinion most government employees do a fantastic job of running this country.

If this is true, then pray tell why is the country falling apart? Don't go and try to say it's the elected officials fault, because it's the komuin who carry out the orders. There are nearly 3 MILLION komuin in Japan and 20% are in administrative positions, meaning paper pushers.

If koumuin are doing such a great job, then why are local municipalities going bankrupt? If they are doing such a great job why is Tohoku still a mess? I could write a huge list, but I won't you should get the idea. It's komuin that grease the wheels on public service jobs and rebuilding funds distribution and those folks are doing a fantastic job?

Either you are komuin or blind, don't know which.

0 ( +3 / -3 )

"If this is true, then pray tell why is the country falling apart?"

Because the banks/financial sector wrecked the economy in 1991. And then the ensuing recession prompted calls to reform not to the financial sector, but to the real economy, which was never the problem, as Toyota and even Sony were doing brilliantly in the lead-up to 1991..

The supply-side, free-market reforms to an otherwise healthy real economy post 1991 is the root of today's problems. That explains why corporations are earning record profits, yet refusing to pay workers in line with the cost of living.

-1 ( +2 / -3 )

...42% of firms plan to raise wages at least as much as last year. Still, many are cautious with 44% undecided.... Last year, monthly average cash earnings rose 0.8%, posting the first gain in four years and the fastest growth in 17 years.

Should be something similar. Some firms will give a raise but it will not keep with the increase in prices. Then the government will trumpet this as a great achievement.

0 ( +0 / -0 )

Because the banks/financial sector wrecked the economy in 1991. And then the ensuing recession prompted calls to reform not to the financial sector, but to the real economy, which was never the problem, as Toyota and even Sony were doing brilliantly in the lead-up to 1991..The supply-side, free-market reforms to an otherwise healthy real economy post 1991 is the root of today's problems. That explains why corporations are earning record profits, yet refusing to pay workers in line with the cost of living.

Oh come on, if anyone has been on this country long enough you would know that the government and big business walk hand in hand with one another. It's the governments policies that allowed corporations like Toyota and Sonyto make a killing. Look today, Sony isnt doing so great and Toyota, well, they are not either. But those two companies alone did not make Japan Inc what it was during the bubble.

This is not a supply-side, free-market economy, it is an economy that is heavily subsidized and protected from world markets by the government.

-1 ( +1 / -2 )

Gov't pressures companies to raise wages?

Point 1: This is preposterous. Can you imagine what would happen if a European or American leader started banging on to industry, "Please pay your staff more, otherwise my promises won't come true and I'll look silly"? He/ she would be laughed out of office - and rightly so. Unless Japan becomes an outright communist country, Abe can wish all he wants, but can't demand anyone raises wages;

Point 2: Since when did the verb "to pressure" come to mean "make meek entreaties with no expectation of success"?

Pathetic. Abe, pack your bags.

1 ( +2 / -1 )

How were these same companies who import goods getting on back in 2007 2008 when the yen was at 120?

The yen is around where it used to be for years and years but now suddenly you think business cant sustain it?

StormR -- you really don't get it, do you? The fact that the yen was at 120 even or eight years ago has no bearing on the problems faced by import-sensitive businesses. These businesses can only do one of two things given the plunge in the yen -- they could try to eat the increase cost, but this will hurt their profits, and thus, no increased wages for their workers, which Abe is pushing for. Or, they can try to raise prices to consumers, but with only a .8% increase in monthly wages, they face the very real possibility of lost sales, and thus lost profits, and, thus, no wage increases. Has it not become obvious to you, as it has to many posters and economists, that Abe's dramatic weakening of the yen, as well as constantly taliking about 2% inflation, has come back to roost? Folks are paying higher prices for imported products, with at best flat wages, combined with a concern that they need to save money, because things may very well get worse before they get better. His simplistic belief that helping the export-oriented companies, has painted him into a corner, and he is just throwing around meaningless language "so that the warm breeze of economic recovery will reach every corner of Japan,” Since when is "warm breeze" an economic policy?

-1 ( +4 / -5 )

How were these same companies who import goods getting on back in 2007 2008 when the yen was at 120?

BTW the yen was only at 120 for the months of January and February of 2007, it steadily declined and in January of 2008 it was at 107, December of 2008 it was at 91.

One would have to go back to 2002 to see a rate of 130+ .

0 ( +2 / -2 )

My gov't funded teaching job took a salary cut of 10% last year. PM Abe, is this what you mean by "warm breeze?"

1 ( +1 / -0 )

abe is such a bumbling moron. How did Japan manage to end up with him??

-2 ( +3 / -5 )

He can threaten to withdraw their lucrative government subsidies and to review procurement contracts, suggesting more contracts should go to their foreign competitors. companies will just hire fewer workers, fire more temp workers and move more production overseas. this is why big business in Japan has got the J Gov by the nads

1 ( +1 / -0 )

To PM Abe: I've said it before and I'll say it again: Make equal pay for women manditory and you will have raised wages and more women in the work force!

YubaruFeb. 13, 2015 - 09:23PM JST

Don't go and try to say it's the elected officials fault, because it's the komuin who carry out the orders.

YubaruFeb. 13, 2015 - 10:28PM JST

It's the governments policies that allowed corporations like Toyota and Sony to make a killing.

Yubaru: On one hand you say the koumuin are at fault for the current state of Japan's economy, and in another post you say it's the government policies... which is it?

How could you possibly blame the people who are only following orders, more than the ignorant leadership who are giving them the orders? At an individual level, government workers in Japan are far more serious about their jobs than what I've seen in the US or Canada.

1 ( +1 / -0 )

Yubaru: On one hand you say the koumuin are at fault for the current state of Japan's economy, and in another post you say it's the government policies... which is it?

Both, the national government walks hand in hand with large corporations and the keidanren and the local governments are walking hand in hand with local businesses. Just yesterday another koumunin where I am at was taken into custody for passing along "secret" information regarding a large public works project that was being bid on, he gave a friend the low bid information and that company under-cut the previous bid and won a $20 million plus contract. This happens quite a bit where the folks in the town offices have too much influence on public works projects.

THey both are at fault.

How could you possibly blame the people who are only following orders, more than the ignorant leadership who are giving them the orders?

Do I really need to expound on how many times in history that this excuse is found to be lacking?

-1 ( +0 / -1 )

OK Yubaru, so you're talking about corrupt koumuin, while I was talking about the general population of koumuin. Forgive me... by the tone of your comments, I thought you were blaming honest, hard-working people for bringing Japan down. You said it yourself: there are 3 million koumuin, and only a handful abuse the system.

1 ( +1 / -0 )

OK Yubaru, so you're talking about corrupt koumuin, while I was talking about the general population of koumuin. Forgive me... by the tone of your comments, I thought you were blaming honest, hard-working people for bringing Japan down. You said it yourself: there are 3 million koumuin, and only a handful abuse the system.

People who become koumuin for the most part it seems, do so not out of a sense of service but because of the stability getting hired gives them. They are also seen as being higher on the social scale and some how "better" than the average person who works as a salaryman.

Not saying they are bad apples, but there is a problem with the system as it is, as it hires people who can only pass a test, like so many other positions in Japan as well.

0 ( +1 / -1 )

i'll tell you the only one good way to increase wages- and it's true too! We outsiders got no say in it all of course, but i can't resist mentioning...that's right. You guessed it: UNIONS. Bring back the unions. And then bring down the dispatch, job laundering racket ( that will cause murderoos and otherwise fatal consequences for many along the gravy train...) . Then, move to profit sharing. Yes, that means the company president, vice, and chairmen,etc are all elected. Voting rights are weighted to reflect seniority/personal collateral in the firm- to an agreed upon limit. Four day week. five week vacation( yes, a real holiday just like the good ol' days o' summer....at least back before you turned 13 and had to start to wear a uniform ALL year, and sometimes a wool cardigan in August...on your way to further babysitting at school).

To recap, we outsiders...um...no. Not us...Nipponers the whole land over...sad, sad indoctrination for these poor chaps..a future of eating IRORI- roast potatoes (...good thing they got a nice variety of sorts...gotta love the purple ones). So why the cynicism? Because i love this country, and i don't wanna have to leave, but i know it is unavoidable that this next coming generation will further withdraw into solitary tech/game/fantasy/whatever, and society will fail to improve once again, adding to the misery of a nation more or less inept at expressing themselves and even having fun, i.e. most types don't truly know how to have a good time,and subsequently, there are no real great meeting places, people watching spots to read a journal, etc. and SPENDING also means time, not only money. Get it? How can someone imagine prosperity without having happy folk spending a happy, enjoyable time with other like minded adults? Forget the IZAKAYA model. I'm speaking of individuals, not the herd...

Japan needs a social revolution of sorts that rejects grandpa's old way of seeing the nation state...that rejects it vocally...the old adolescent-minded habit of gabing and hiding away in some basement bar til morning will not serve the youth of any generation...of course nothing will ever 'change'. not ever! Cause new young basterds are forever being groomed to step up and replace the old and dying basterds, and they ARE the ones who got 'organized' ( same the world over...)

1 ( +2 / -1 )

You guessed it: UNIONS. Bring back the unions. And then bring down the dispatch, job laundering racket ( that will cause murderoos and otherwise fatal consequences for many along the gravy train...) . Then, move to profit sharing.

Do you live or know anything about Japan? Japan has unions, but they are in bed with management too, Unions here have no power.

0 ( +1 / -1 )

The yen was way above 105 for years, people still did business and imported goods, how about 105 - 133 range for most of 2000's , please tell me how was it at 133yen ( or close to ), was it hard then too ?

Guess all these companies in business who import are brand new coz no one would have been able to survive or function back at 133yen going on what you are saying.

The yen is around historic levels. If you find it too hard now then maybe you live in the wrong place or doing the wrong work.

-3 ( +1 / -4 )

The yen was way above 105 for years, people still did business and imported goods, how about 105 - 133 range for most of 2000's ,

Talk about covering one's comments (butt) here. 105-133? Ok 20 plus years ago the rate was 170 to 300 too!

0 ( +1 / -1 )

yubara yes, so how come you say people and business is struggling now because the rate is 119, the yen is where it should be.

-3 ( +1 / -4 )

yubara yes, so how come you say people and business is struggling now because the rate is 119, the yen is where it should be.

StormZ the climate is different by far, if one only uses the yen rate to base their argument on then they really are missing out on the bigger problems with the economy. The yen rate is one problem, and the speed with which it dropped matters too. But it isnt just the yen rate, yes that is one major factor but not the only one.

The economy has changed, and lets not forget that included with the drop in yen rate saw a jump in taxes as well. Taxes have been going up steadily for the last 20 years or so and these things effect the equations too.

1 ( +2 / -1 )

Yubaku Sales tax has increased yes, but your argument was based on the exchange rate and how it hurt importers and shoppers which I have addressed, seriously, business's worth their salt are enjoying conditions, did you read about the 24% increase in machinery orders? Things are not as grim as you like to paint them.

0 ( +1 / -1 )

Since you have a problem with typing people's handles properly, I will refrain from responding to someone who chooses not to think.

0 ( +0 / -0 )

Our pay has been frozen for the next three years. The education ministry can probably be blamed for that, despite the university supposedly being "independent". Also, Abe refuses to raise wages for civil servants, so he has no right to lecture companies on what they should do.

-1 ( +0 / -1 )

Yubaru wrote: " Do you live or know anything about Japan? Japan has unions, but they are in bed with management too, Unions here have no power." I hope he checks back, but for the benefit of others, I will add :

My wife told me that when she received her teaching license from the government, she needed to sign a paper promising not to join a union...of course she could have simply reneged and joined afterwards...

When i wrote 'bring back the unions', it MEANS to bring them back to the forefront, to restore respect , dignity, and rights for workers...( in Canada the gov. sometimes has to legislate teachers back to the classroom ( poor kids, eh ). Japan should step back up and play ball with the unions, not bash and demonise them ( unions over here in Japan have to sneak around and secretly book hotel resorts for their meetings, needing to book decoy reservations to throw the spies off the trail...CUBI? canyoubelieveit).

I hope Mr. Y is from here, so he gets a pass on the provocative question...

Whose toes have I treaded? and who let the dogs out? woof,woof,woof!

0 ( +0 / -0 )

Abe is such a bumbling moron

Thank you for your input. By the way, when is the yen crash that you predicted going to happen?

2 ( +3 / -1 )

If one is a regular employee of a large company then one should indeed get a share of the profits. But the percentage of regular employees at large companies compared to the overall work force is miniscule, and so even if a big zaibatsu increases the wages of its regular employees the impact on lower rungs would be miniscule. This is also a problem because some large companies are decreasing employment of regular employees through attrition or even "restructuring" because of a decline in competitiveness.

Sure, an increase in wages would help, but until there is a higher degree of dynamism in the economy, we should not hold our breaths on the efficacy of a whole string of one off solutions that add up to a sum less than their parts.

0 ( +0 / -0 )

Prime Minister Shinzo Abe and his economic ministers are piling pressure on companies to raise wages to sustain growth as the economy climbs out of a recession triggered by a sales tax increase last year.

"Please pay higher salaries so our policies will work" is what Abe and his "economic" ministers are telling businesses. Assuming wages are increased, the rise will be meager. Also, higher incomes mean taxation will negate much of the benefits of a higher salary.

If companies are to raise salaries, more work on free trade, and business tax cuts needs to be done. The government, at all levels, should also commit itself to not hike income taxes if wages go up.

Liberalizing the economy also has to happen. That means openning the Japanese market to foreign investment, and trade.

The problem with PM Abe's policies is that they're all designed to make the government the driver of the economy. This is an anachronistic, and very socialist approach to government intervention in the economy. The state should be a facilitator, not an actor in the economy.

0 ( +0 / -0 )

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