Gov't eyes shopping vouchers, promotions to boost consumption

Yes, that is what we need in Japan, discount events like Black Friday ugh.

Sigh, who comes up with these silly ideas? People don't WANT vouchers they want money, cash, plata.

There is also lingering speculation that Abe will cancel a nationwide sales tax increase scheduled for 2017 and focus more on fiscal spending to raise GDP and rebuild areas damaged by an earthquake in southern Japan earlier this month.

Hah yeah right, I believe they still need money for the new Olympic Stadium etc.

Just reduce sales tax to increase spending.... oh wait....

Desperation setting in now it seems. Raising my taxes will just mean you can squander even more of my taxes. What will you do when the whole land is covered in concrete? Try something else please, it's not working.

How about giving out cash like they did a few years ago. I remember how how astonished I was that my students couldn't believe foreigners received the money too!

These people are desesperetly stupid.

Classic flailing

Just take two tiers of management out of the public sector if all they can come up with is this bollocks.

Here's an idea, lower taxes so people actually have money in their wallets to spend. The more money people have, the more they spend or at least the people in government sure as hell do.

Accelerate inflation.

Just what we need to improve the economy.

Higher prices and higher consumption tax.

Do they even think about what they are saying?

The core problem is wages. Force employers to pay their workers in line with the company profits/labor productivity. Problem solved.

if they give people cash then they will just save it. by using vouchers, the money has to be spent. and most likely the vouchers will be for household goods, not food, in order to pass the money on to manufacturers, too. but by announcing it so far in advance, this quarter's gdp is going to crater because people will wait to spend.

but like i said all along, i don't care how they give me my taxes back, just as long as it's not being spent on roads to nowhere i'm happy.

some economists have said sluggish growth in real wages and Japan’s shrinking workforce make it difficult to reach this target.

Ya think?

Authorities will also take steps to increase inbound tourism, raise the national minimum wage and encourage more IT investment

idiots

ok. lets break this down- inbound tourism..ya don't say. .. HOW??? 40% of the workforce is temp and THEY don't make enough money to travel. Recently, they don't have the time either since they have to work crazy hours just to make ends meet. The 60% that MIGHT be able to financially afford it can't afford (or are too ashamed) to take the time off.

raise the national minimum wage. OH YEAH! That anaemic 70 yen an hour raise per year for the 40%? Yeah. That'll work.

encourage more IT investment..Wha..? What does that have to do with the prices of yoyos in Akiba? about the same as improving consumer spending...NOTHING.

The US is talking about a $15 minimum wage. So lets start there. Want to increase household spending? Here's how.

Minimum Wage 1500yen per hour. New Law: ALL employees in Japan, Full or Part time, MUST clock out at 40 hours a week. If you work 10 hour days, you can ONLY work four days etc.. OR from your 41st hour you MUST be paid double. failure to do this will result in a 1 million yen fine PER EMPLOYEE PER MONTH who is made to work overtime illegally. ALL COMPANIES are required to pay their employees' transportation costs and health insurance REGARDLESS of their position as full or part time.

Do that and you will see some serious consumer spending. These stupid vouchers aren't going to do anything.

Minimum Wage 1500yen per hour. New Law: ALL employees in Japan, Full or Part time, MUST clock out at 40 hours a week. If you work 10 hour days, you can ONLY work four days etc.. OR from your 41st hour you MUST be paid double. failure to do this will result in a 1 million yen fine PER EMPLOYEE PER MONTH who is made to work overtime illegally. ALL COMPANIES are required to pay their employees' transportation costs and health insurance REGARDLESS of their position as full or part time. Do that and you will see some serious consumer spending. These stupid vouchers aren't going to do anything.

Aly,

You need to quite trying common sense, it doesn't register here sadly

The core problem is the combination of Keynesian economics, Socialism, and the buffoons known as politicians. And their enablers/apologists. Roll back the consumption tax to 3% first, cut wasteful spending, and then watch the economy recover as people gain confidence.

They are becoming more and more desperate as they realise their gambling hasn't paid off at all, and the future is more than bleak. Doesn't matter if they raise the tax next year or not, the nation is screwed either way. A few Black Friday-esque sales are only going to increase sales at those shops on those days, if at all.

WAGE HIKES. Baffling really. They'll propose anything but.

Great! Just an example of average Japanese 'happy' to be working! My wife just started new work - paid at the minimum, overworked, with less that what law stipulates holidays. Now go and spend!

How about doing something like FIXING THE ECONOMY???? This is the reason that Abe was elected prime minister. Remember ABENOMICS? But we still have 40% of the population at irregular employment etc etc etc. No wonder nobody spends or marries or has kids. When will this sink in to the ruling class? Well, they are all millionaires, so they will never understand. Let's sell Japan to China.

JeffLeeAPR. 26, 2016 - 04:11PM JST The core problem is wages. Force employers to pay their workers in line with the company profits/labor productivity. Problem solved.

This guy right here, he gets it.

To everyone who thinks taxes are the big problem: Reduce taxes, and Japanese consumers get a couple percentage points more spending power. Maybe it adds up to a fair bit if they get it all at once, but spread out over the year it's barely noticeable. Instead, think of the huge drain the current management culture in Japan is taking on the economy.

1: Company lets workers get pressured into unpaid overtime.

2: Workers have less time to spend money and enjoy life. Consumption goes down.

3: Workers are overworked, stressed, and as a result make more mistakes that need other workers to work harder to correct them. Productivity goes down.

4: Because workers aren't reporting their true hours and aren't getting paid for their true hours, fewer taxes are collected. Government revenue goes down.

5: Because managers feel no pressure to get workers out at a reasonable time, there is no incentive to work efficiently. There is no need for management to examine their workplace to make sure workers' time is being spent properly. Productivity goes down even more.

6: Productivity is down, so ask workers to do more unpaid overtime. GOTO 1.

From Wikipedia:Karoshi The problem with unpaid overtime in companies is that the overtime is simply not recorded in many cases. The amount of overtime is regulated by labor regulations, so, in order to not contradict labor regulations, workers are told not to record the overtime, since it would be considered an illegal action from the side of the company... In some cases .. employees have been reported to have worked 300 hours of overtime in a single month.

Just think of how much money that 300 hours of unpaid overtime (multiplied by everyone who does it) sucks out of the economy every month.

Minimum Wage 1500yen per hour. New Law: ALL employees in Japan, Full or Part time, MUST clock out at 40 hours a week. If you work 10 hour days, you can ONLY work four days etc.. OR from your 41st hour you MUST be paid double. failure to do this will result in a 1 million yen fine PER EMPLOYEE PER MONTH who is made to work overtime illegally. ALL COMPANIES are required to pay their employees' transportation costs and health insurance REGARDLESS of their position as full or part time. Do that and you will see some serious consumer spending. These stupid vouchers aren't going to do anything.

Well it would probably inflate prices, if that's what you want. Not sure how sustainable that is. The money for the pay increase doesn't come out of thin air.

So they give out free money which is just really printed up any way so its not real but just adds to the national debt which bad luck boys and girls, you have to pay for anyway in taxes and being enslaved to the Govt

F.

Robbing the children and unborn to pay today's adults is not a growth strategy, it's an inequality promotion strategy, but it's the best the folks in charge are able to think up.

Dale Jorgenson was in Japan recently and had better ideas for growth.

He noted that Japan needs a "Productivity Revolution", noting "The traditional approach to growth strategy in Japan is to subsidize favored industries. When industries mature they try to block competition through government regulations. The new industrial policy is to drill through “bedrock” regulations to stimulate competition." http://scholar.harvard.edu/files/jorgenson/files/16_0316_jpec.pdf?m=1458854774

That was the original 3rd arrow of Abenomics, but Abe realised that he can't get himself re-elected by eliminating protections and facilitating competition in this country, even though more competition is precisely what Japan's economy needs, and precisely what would lead to higher wages.

Government gets in the way too much. Just get out of the way some more, and allow the natural competition for labour push wages up.

Ten to one odds, all of the vouchers are for companies who have 'friends' in high places, and know how to pass along the right sized brown envelope.

Some are calling for increased government controls on wages but IMO it is the last thing the economy needs.

Government dictating the price of anything is a recipe for further failure, and that includes the price of labour.

Prices are naturally set by supply and demand.

If the demand for labour is low, wages will be low. To boost demand for labour (and thus deliver wage increases), the government needs to boost the metabolism of the economy, and enable new businesses to easily spring up and compete for labour with the existing employers.

The strongest employers will win out, and labour will be rewarded with higher wages. The entire economy will experience a win (except for the useless business who will go out of business - boohoo).

Yet, Japan's ranking in the "Doing Business" survey has gone DONW, not up, since Abe came to power. Government enacting further price controls on the economy is not a step that would move Japan's ranking in the right direction.

This is really scary.

Prices are naturally set by supply and demand.

Carteling. If the vast majority of companies can explicitly or implicitly agree on low wages, then employees can only choose from low wage companies. Even emigration becomes difficult if you have no money.

How about cutting taxes, morons!

Can anybody else see the boat sailing off into the sunset? These old folks have missed the boat! Shopping vouchers and promoting 'black Friday' events? Seriously? I've got a suggestion for them. How about they start taxing the rich and stop manipulating prices on daily commodities? These twits have no farking idea at all what they are doing? Do they have a deck of cards with possible economic fixes and they just throw it up in the air and see which cars land face up? I can never get used to the inadequacies and idiocies of the Japanese economists.

all work and no play...who has time for spending? It's work work work, Japanese style. Work til death (for the young)! And no one really wants to change. Or more likely they just don't have any real ideas. Domestic consumption can't but fall. That's a given.

One way for high sales taxes to work is that people in low income brackets would get all that sales tax refunded as "vouchers" maybe even quarterly. Instead of vouchers the money could be put into investment accounts for school or even buying a house.

These people are desesperetly (sic) stupid.

As are many of those who voted for them (Others are just helping themselves to the public trough).

I'll usually use soft toilet paper as butt wipe but if vouchers are going to replace it then I'm willing to help out to aid the national economy......

raise the national minimum wage

This is horseshit to those that understand the economy here. There really isnt a set national minimum wage. It varies greatly by region and by job sector as well.

There are folks working in Okinawa for 683 yen per hour and some even less. Like the driving service, "unten daiko" the driver's of the following car sometimes get as little as 3,000 per night, for 9 to 12 hours of work. The wage scale here is BS and just used to appease the press.

Look at the link for the discrepancies and "explanation".

http://www.tradingeconomics.com/japan/minimum-wages

Quo Vadis, Abe?

Black Friday called in a rescue to save Japan economy, wow how come nobody thought about that in other countries before, this has to be the solution to all our problem. Thank you very much for sharing your deep understanding of what is pressuring all of us Mr Prime minister, we were so in need of that Black Friday promotion for a week to help us re-starting the economy. Another Abe's epic failure ahead.

"Government dictating the price of anything is a recipe for further failure, and that includes the price of labour."

That would be true if companies were paying wages in line with their profits and productivity gains, which is what they are supposed to do. They aren't. Someone needs to do something to fix this market distortion, and it may as well be the govt.

JeffLeeApr. 26, 2016 - 10:59PM JST

That would be true if companies were paying wages in line with their profits and productivity gains, which is what they are supposed to do. They aren't. Someone needs to do something to fix this market distortion, and it may as well be the govt.

After many years, I find a JeffLee post I agree with.

As Noriko Hama said 3 years ago, If the Japanese government was really serious about introducing inflation into the economy, it would double the minimum wage.

Of course it was taken as said that the spouse tax code would be gotten rid of.

The service economy of Japan is the leader of the fight against deflation. When the general populace have to pay double what they are paying for their proverbial Big Mac, they might start pressurizing their unions into doing the job they are meant to do; looking after the welfare of their members.

Gary Raynor: It the greedy 10% . you know the Japanese elite who hide their money and say I am poor we can afford to rise the minimum wage. It needs more then 100% rise. Japan can afford 150% rise. I want the Japan elete to start paying their share. At 7 % rise each year for 20 years Japan can easy afford that. The union bosses are in the back pocket of the Yakaza. The rank and file have no one the go into bat for them. and they are that scare to strike because the union will not back any proposal for a rise in the minimum wage. Japan is a basket

its shocking how out of touch Japan is with its own people. People don't have faith in Japan's economy. Thats why they're holding on to their money and spending less

Here is a concise article on the battle between Japanese government minions and the free market:

https://mises.org/blog/how-central-planners-crippled-japan’s-economy

We can also say "Thank you Koizumi!!!!" He is the prime minister who thought Japan would make economic progress by imitating the USA. So he changed all the employment laws, and look what happened. 40% of the population have irregular employment. No stability. No marriage. No kids. No shopping. Thank you Koizumi!!

Give up already.... they're just digging the hole deeper and deeper. Facts are facts..... declining and ageing population. They need to cut the budget and get realistic.

gokai_wo_manekuAPR. 27, 2016 - 06:07AM JST We can also say "Thank you Koizumi!!!!" He is the prime minister who thought Japan would make economic progress by imitating the USA. So he changed all the employment laws, and look what happened. 40% of the population have irregular employment. No stability. No marriage. No kids. No shopping. Thank you Koizumi!!

This gets said a lot on this board and it's not really true. Japan didn't imitate the USA, at least not completely, and we know this because the USA doesn't have the same problems. Koizumi did shake up the labor laws a little bit, but it's still practically impossible to fire someone unless they've done something as extreme as breaking a law, which is why companies are reluctant to give the sweet contracts out. Let them fire incompetent workers, and you'll see a real shakeup.

@gokai_wo_maneku I am not sure the blame lies with Koizumi in particular. Japanese corporations were well on their way to hollowing out Japan socially by his time. Their demands on employee time ensures no time for anything else. Their first picks on all resources and government policy ensures nothing much is left for, you know, people and their relationships - the real units and bases of society. From education to justice, almost everything has been set up to favour companies. To the extent that Koizumi helped in this process it would be no surprise to find the company hand pulling his strings.

Kazuaki Shimazaki,

The government's best approach is to eliminate anti-competitive practices such as cartels.

Disillusioned,

The enemy is not the rich, the enemy is the useless bureaucracy that weighs us all down. Rich people would potentially invest their money if economic conditions were improved, and create jobs in the process. Taxing rich people more just means government squanders more money that can not be put into productive investments.

JeffLee, Gary,

That would be true if companies were paying wages in line with their profits and productivity gains, which is what they are supposed to do.

I disagree. What companies are supposed to do is make money, and in doing so they need to pay market rates for their inputs of which labour is one.

If you say people should get a raise when profits have done up, do you agree with the converse that when profits go down people should suck up a pay cut?

I say no. Labour should be priced by the labour market, not by some bureaucrats idea of what the price should be at a given point in time.

(Also, there have been no productivity gains in Japan. The increase in profits in recent years was increase in nominal yen profits due to the greatly depreciated yen, not because of great productivity increases.)

katsu78,

Koizumi did shake up the labor laws a little bit, but it's still practically impossible to fire someone

Totally agreed. This is a huge issue for the Japanese economy, but alas taking away the vested interests of unproductive Japanese workers won't win elections.

@fxgaiAPR. 27, 2016 - 10:16AM JST

The government's best approach is to eliminate anti-competitive practices such as cartels.

How do you propose to stop companies from reviewing what other companies are offering for similar work before setting their own offer?

Sure, there may be some companies that want top talent and pay decent rates. They absorb the top say 10% of what's available. The rest of companies go for the 20-90% pool and there is relatively little difference in that area, so there is little motivation to pay more to take the 20th rather than 50th percentile. They can thus offer the same dregs. The last 10% goes to the cheapskates that pay lower than the going rate.

I don't propose to stop that (that isn't what a cartel does). Considering the market price is what every normal buyer does when considering how much to offer.

there may be some companies that want top talent and pay decent rates. They absorb the top say 10% of what's available.

Yes. Japan clearly needs more such good companies, to foster more competition for labour.

The lack of such competition is the root cause, so the focus should be on what needs to be done to nurture a more competitive business environment.

Government skipping it's homework and just trying to artificially manufacture the desired outcome by outlawing market price signals won't work, and will likely make things worse.

Government needs to analyse why there is a lack of competition in the Japanese economy, and address those underlying issues.

It's not like Abe doesn't know what is required. As Jorgenson advised Abe recently, the "bedrock" regulations need to be hacked back to enable more competition, and that was the original 3rd arrow. But implementing such policies have the downside of making it harder for Abe to get himself re-elected.

The minimum wage must be raised to at least 1,200 yen per hour or more. The more money people earn, the more they will spend. In fact anyone on a minimum wage ends up spending it all to try and live. Raising the minimum wage will only benefit the government more as people are more likely to pay in to the pension fund and health insurance which I know the government is having a hard time collecting the payments. Not that I agree with the way pension is collected as other countries fund the pension from the normal tax take.

It is better that consumption tax is higher and used towards the pension system instead of people trying to pay out of their low wages. It works out ok in NZ and Australia. Japan has about the lowest minimum wage out of all OECD countries surveyed recently.

Why not go for a 10,000 yen minimum wage? Since it's such a good idea why not go big?

Maybe there is something I am missing here about these minimum wage hike ideas. But I don't want to be paying kids in their first jobs ridiculously high wages considering the work they might be doing. I want kids to have an incentive to get more skills and become more productive members of society, but paying them in excess of market wages at the margin would reduce those incentives - if their employees continue to employ them at exorbitant rates at all.

Why not go for a 10,000 yen minimum wage? Since it's such a good idea why not go big?

Nothing like an extreme to show how moderation is incorrect.

Japan’s government might issue spending vouchers and promote national discount-sales events similar to Black Friday in the United States to boost its lackluster consumer spending and accelerate gross domestic product growth.

This claim appears to be bogus. According to the Nihon Keizai Shinbun

喚起策として盛り込んだ額面以上の買い物ができる「プレミアム」や、ブラックフライデーのような一斉セールは財政出動を伴う。財政で消費を支えても「需要を先食いするだけ」（みずほ総合研究所の長谷川克之市場調査部長）との声がある。

the proposal for Black Friday sales is a suggestion from a private think tank Mizuho Sogo Kenkyujo as is the proposal for vouchers.

I personally do not have a high opinion of Abe's economic policies, but I do think he should be criticized for his actual policies, not something that has been suggested by a private sector analyst.

This article looks like yet another case where the English report is seriously garbled. It appears that whoever wrote this English article conflated suggestions being made by non-governmental pundits with what the government is actually considering.

There is more than enough to criticize in Abe's actual policies with lumbering him with the ideas of pundits and commentators.

Strangerland, yes deliberately extreme. The point that using the extreme illustrates is that the arbitrarily chosen 'minimum' level may make things worse for the economy than better. 10,000 would be obviously bad, but whatever level you chose might also be bad to a degree. This isn't a decision that is a freebie with no trade offs.

I don't think anyone is smart enough to know exactly what level would be good, rather than bad, and thus I'd rather natural forces determined wages. But is the nature of some humans to want to try to control the world I guess.

I don't think anyone is smart enough to know exactly what level would be good, rather than bad, and thus I'd rather natural forces determined wages. But is the nature of some humans to want to try to control the world I guess.

If the free-market capitalists could self-regulate, we wouldn't need regulation. Unfortunately, free-market capitalists have only shown that they will take as much from the bottom to give to the top as they can, and therefore we need regulation to ensure that the people at the bottom at least have a fighting chance.

Free market capitalism does self regulate, that's why Mitsubishi Motor stock has been cut in half in a matter of days. That much is good news for Japan.

If you want to help out people on the bottom wrung, I say there are better ways to do that than by governemt arbitrarily setting the price of labour, which may have unintended consequences.

And kids shouldn't be paid much for doing a first job anyway.

"Free market capitalism does self regulate..."

That's what people believed during the industrial revolution, an era of few regulations and little govt "meddling." Read Oliver Twist. Workers including children lived in abject poverty, died extremely young of industrial diseases and while cities were covered in black soot. Manhattan was strewn with sweatshops and slums. Meanwhile the rich were super, super super rich.

Things only got better after government reforms, prodded by labor unions. 40 hour work weekend, weekends, emergance of the middle class, massive health improvements: we can thank to brave people and govt institutions who stood up to put constraints "free market capitalism."

Several progressive measures were undone from the 80s, which has since coincided with today's income and growth stagnation.

Free market capitalism does self regulate, that's why Mitsubishi Motor stock has been cut in half in a matter of days. That much is good news for Japan.

If that were true, you wouldn't see the bottom 60% of the people having 2% of the wealth. Stock prices do not matter to the person at the bottom, they have almost no effect on their life whatsoever.

If you want to help out people on the bottom wrung, I say there are better ways to do that than by governemt arbitrarily setting the price of labour, which may have unintended consequences.

Yet, no other way will ensure the people at the bottom get treated fairly.

Jeff Lee said everything else that needs saying.

If that were true, you wouldn't see the bottom 60% of the people having 2% of the wealth.

That's not a "failure" of free market capitalism. (When a Mark Zuckerberg builds up a FaceBook and becomes a billionaire, that's not a result of him taking money away from people at the bottom, that's a result of him and the people he worked with creating new wealth, adding to economic growth and employment.)

Free market capitalism is the goose that lays golden eggs and makes us wealthier as a whole.

The inequality you describe is a failure not of markets but of government. It is the government that has the ability (and responsibility) to tax the populace and redistribute that wealth amongst the populace as it sees fit. It's a political decision how much taxed wealth to redistribute to who, not a market one. A free market is not supposed to redistribute wealth, it is supposed to aid in setting prices so people can figure out what to buy/consume and produce/sell, which helps us have economic growth.

The more wealth that free market capitalism generates, the better off we all can be (if the government does it's job).

On the contrary (another extreme for you), try redistributing a basket of eggs, and then 60 trillion yen, and see which one results in people at the bottom being better off.

No one tries to nail in a nail with a bowl of jelly. You use a hammer, because it's the right tool for the job.

Stock prices do not matter to the person at the bottom, they have almost no effect on their life whatsoever.

Any one who wants their pension to be more secure should be on their knees praying that the government does things that will help sustainably boost stock market prices, e.g. business friendly policies.

That's not a "failure" of free market capitalism.

Yes it is.

(When a Mark Zuckerberg builds up a FaceBook and becomes a billionaire, that's not a result of him taking money away from people at the bottom, that's a result of him and the people he worked with creating new wealth, adding to economic growth and employment.)

One example doth not make a rule.

Free market capitalism is the goose that lays golden eggs and makes us wealthier as a whole.

Except that it doesn't. Wages have stagnated for decades in most developed countries, while the rich keep getting richer, and inflation means things cost more.

The inequality you describe is a failure not of markets but of government.

Nope. The fact that people are not working 60 hour work weeks, over 6-7 days is a result of regulation. It's the government preventing the little guy from being entirely screwed over.

The problem is, you are trying to make arguments that are not born out by the reality of the world we live in. It only takes someone looking around with open eyes to see that free-market capitalism is screwing everyone except the richest people. And I say this as someone who is in the upper levels and not getting screwed. If I were looking out for my own best interests, I would be pushing the same narrative you try to.

The Mark Zuckerburg FaceBook example is not the only one I could have pointed to, but I think you got the point. Successful business is good, not only for the boss but all the people who get employed as a result, and the government too through increased tax revenues (e.g. higher income tax revenue, higher consumption tax revenue as those employees earn and spend more). And that in theory could be good for the poor too, as the government has greater means with which to help support them.

Wages have stagnated for decades in most developed countries

Free market wages are what they are.

If they aren't going up, that's not because the free market wages are "wrong", it's because the government's crappy policies haven't produced a competitive business environment which would make labour in higher demand.

"So what" if the "rich are getting richer"? That's more tax paid, and more money to be productively invested. The rich getting poorer wouldn't help anyone, it'd be less tax and less productive investment.

And any inflation you might complain about is not the fault of free markets, it again is the fault of governments. Either those who want inflation to devalue the real value of the humongous debts they have racked up, or those who bring it upon their people like in Venezuela through terrible interventionist policies.

The fact that people are not working 60 hour work weeks, over 6-7 days is a result of regulation.

That has nothing to do with minimum wages, but people would quit their jobs and do something more productive with their time if their employer were to try to pull that on them. Employers themselves understand in 2016 that happy staff are good for business. (You claim to run a business so presumably know this too.)

The problem is, you are trying to make arguments that are not born out by the reality of the world we live in.

So what is believing that government can successfully dictate prices and not screw up the economy, despite numerous examples of failure, such as butter in Japan and virtually anything you might want to buy in Venezuela?

free-market capitalism is screwing everyone except the richest people. And I say this as someone who is in the upper levels and not getting screwed.

So there are people getting screwed, but you aren't one of them (I ain't either)... but because of some issue you imagine to exist, you want government to start messing with free markets, rather than just give a greater proportion of the tax they collected from you and me to those in need? What do you think you are paying taxes for in the first place, if it isn't to redistribute wealth to the more needy in society? (I trust you are paying your taxes)

Only a fool or a greedy selfish pig would stand in the way of a 150% rise in minimum wage. This is Why it will work, for the last 20 years wages have stay the same and this has place the most of the burden on the minimum wage earner. That is a hugh chunk of a person life. after 20 year of his or she has gone backward and going without. Minimum wage earner is not going to start hoarding their money after going with out for the majority of their working life. No they spend it because they start living a decent life.

Free market wages are what they are.

Exactly, because the free-market does not regulate them. They keep them as low as they can.

"So what" if the "rich are getting richer"?

It's done on the backs of the poor, it's a problem that needs regulation.

That's more tax paid, and more money to be productively invested.

Many of the large companies pay little taxes. And the money invested rarely goes to the little guy.

Anyways, I could go on point-by-point, but the real world shows all of your theories to be wrong. If free-market capitalism worked, we wouldn't be in the mess we are, with middle classes shrinking, the poor getting poorer, and the rich getting richer.

Only a fool or a greedy selfish pig would stand in the way of a 150% rise in minimum wage.

No, also people who understand the distinct roles of free market capitalism and government would also stand in the way, because we know that it's for our own good. It is actually fools who would think market prices should be overridden, instead of government redistributing taxed income to those in need instead. That's the best way to help them.

It's done on the backs of the poor

No, people like Mark Zuckerburg make people richer, not poorer.

Many of the large companies pay little taxes.

Government should change tax policy, if that is what it thinks.

And the money invested rarely goes to the little guy.

No, money invested in businesses means jobs for the "little" guys, which is people like me. (Does your business not employ anyone besides yourself?)

If free-market capitalism worked, we wouldn't be in the mess we are, with middle classes shrinking, the poor getting poorer, and the rich getting richer.

Again, you're assigning the blame in the wrong place. It is not the bowl of jelly's fault that it can't be used to hammer in a nail. Use the right tool for the job.

These problems you mention (where they are actually problems) are all due to poor government policies in recent times.

Some people on here have never live the nightmare of the minimum wage. My University educated partner has since leaving Uni. The dogmatic attitude by some on this forum have never experience weeks on end of freezing nights going without heating so one can live on rice ball. So pull you head you the overprevillage and try walk in their boots.

It's the role of the government to redistribute wealth to the needy, using tax revenues.

If the minimum wage were hiked, and some employers opt to lay off some workers, the freezing nights will continue to be freezing for those people. It will not be an improvement.

It's the role of the government to redistribute wealth to the needy, using tax revenues.

Anyone employed should not need to be subsidized by the government to afford to live. That's a ridiculous concept. And if the government needs to collect more taxes in order to subsidize salaries, then companies will end up paying even more, because their taxes will be higher, and embedded in that will be the costs for processing those taxes, and redistributing them to the workers.

If the minimum wage were hiked, and some employers opt to lay off some workers

There are a few points on this. First, companies can only lay off employees they don't need. If a company needs the employees, they will have to pay them their salaries. Next, if a company cannot afford their employees because of their salaries, it is not a viable business plan. And finally, it's likely there will be a period of adjustment in which some people will be laid off, and some companies will go under. But after that period of time, more people will have more money, allowing them to spend more, thereby bringing in more income to companies, meaning they will be able to afford the higher salaries.

Over-previllage Fxgai: That is utter capitalist garble. Yes boss will pay more wages with the money they will gain with the increase spending. They will put up their prices and the upper middle class will continue with their lifestyle. Plus they will have new customers the minimum wage earner. Don't quote Capitalist diatribe. You know nothing about human conditioning. The elite use the minimum wage earner as economical cannon fodder. So they can Just hoard there hugh profit away so they can pay the minimal of taxes. What you have present us is what Japan been doing for the last 20 years and IT"S NOT WORKING Greenburg. In that time a country of 20 million have the minimum wage of $20 an hour. It is link with GDP and inflation and that country can afford to by 50 billions with of subs. That country minimum wage earner has the best free medical, education and superannualation system in the world. Yes the boss pay their Supper. THey have a domestic grow of 3% at present. Something only Japan can dream about. When the GFC hit in 2008 what did this country do. Give anyone $2000 to go out and spend and look at that country today Ms or Mr of Miss Over-previllage Fxgai. The minimum wage earner does not want a own home because they know it a pie in the sky for the under-pervillage, They just want to be able to give there children a decent life. With the this minimum wage they can,t. Your off the cuff comment about the "Freezing will continue" is total offensive and just show your dogma attitude toward the under-previllage and low classes.

So you think government shouldn't be assisting low income people???

if the government needs to collect more taxes in order to subsidize salaries, then companies will end up paying even more,

Not if government reprioritizes spending, but you would have specific companies pay higher "minimum" wages by government decree, whereas if this is covered by government taxation the burden is spread evenly across all tax payers. That's much fairer.

embedded in that will be the costs for processing those taxes, and redistributing them to the workers.

So rather than have a taxation system, you'd abolish that and have government control wages directly instead. Interesting. That sort of system was tried and failed last century though, all over the place.

First, companies can only lay off employees they don't need.

"Need" is not absolute. There is a cost/benefit analysis involved. Higher cost reduces the "need". And higher cost of manual labour at the margin makes robotics and such automation alternatives relatively more attractive. So higher minimum wages may result in lost jobs. Not what you are aiming for.

if a company cannot afford their employees because of their salaries, it is not a viable business plan.

But maybe it is still viable by automating that work instead.

But after that period of time, more people will have more money,

Not if the government gets the price wrong and it results in capital investment in a whole bunch of robots. The higher skilled workers who create those robots will do OK, but the lower skilled workers who were made redundant will be out of a job.

John-san,

There's no such thing as capitalist garble.

Your off the cuff comment about the "Freezing will continue" is total offensive

I didn't decide the reality, I just gave you the message.

Google for minimum wage, layoffs, and look what happens:

http://www.newsmax.com/Finance/StreetTalk/UC-Berkeley-minimum-wage-layoffs-unemployment/2016/04/22/id/725286/ http://townhall.com/tipsheet/justinholcomb/2016/04/18/uc-berkley-forced-to-cut-500-jobs-after-15-minimum-wage-n2149066

We can complain about or deny this reality all we like, but in the end it's best to help the poor through government assistance, rather than close our eyes to reality. Helping the poor is one thing I am happy to be paying taxes for, and y'all should be too.

Go peddle your theory the elite they will listen to you because your not asking the elite to start pay. You want the Government to pay and they love that because they pay stuff all Taxes. I show my theory actually work. It Call Australia .Your a bean counter with no knowledge of how the people react when you have your boot on there throat and pressing harder because it not working. And what happen is they start to organise and start rebelling. I for one do not want a bunch of lowly educated with back up running any country. look at Russia when that could not extract any more out they poor. You get a bunch of very dangerous buffin running the place. That what your theory leads to. Your link is just another un-emotional bean counter view which have never experience poverty. "Poverty" A word you have on idea of or experience. Fxgai Your just another bean counter for the elite.

Your generosity overwhelms me Fxgai. You would like to give the poverty stricken Government food stamp. I hate to tell the bean counters that Food stamps don,t pay the train fairs, Gas bill, petrol, hair cuts, medication, dental work ,doctors fees, X-ray , internet and the rent. No Japan can,t not increase the minimum wage because that would put the bean counter out of work and we can,t have that. Without the bean counter Japan would not be the third biggest economy. No Japan can not afford that. lucky I am moving back to Australia with Japanese partner. Who University education will start paying off for her for a decent wage and a secured future. Where I can claim my Employer contribited Supper at the age of 56 were I can live a decent and happy life to a very old age. I really feel for my middle class Japanese friend because no way they will have a secured future like me and a the odd 20 million Aussies with the bean counters in charge.

I never mentioned "food stamps", but in any case public assistance for the needy is better than bad policies that result in people getting laid off.

Good luck in Australia. They have more right overall than Japan does:

http://www.doingbusiness.org/data/exploreeconomies/australia/ http://www.doingbusiness.org/data/exploreeconomies/japan/

If Japan did enough free market reforms then maybe the negative effects of a higher minimum wage could be offset, but I'm not holding my breath for that.

fxgai ; Government Food or shopping vouches is the topic of the article. You are pro, for Government handouts I am con oppose to government hand out but wants the minimum wage double plus. You look at this subject from a bean counter view. I look at from as from a society, has a whole view. You go home to your nice little world and think at everyone go home to the same has you. The little luxury you take for granted like having a shower without having to worry able temp or time. Where a topical minimum wage earning mum will have to have a 3 minute luke warm shower because her and her partner can not afford and flat, have to live in her grand parents plus her parents and her little brother and her, her child, and her partner living in a 2 bed home. You can snuggle up with your partner and have a intimate night. Only intimacy they can have is at a hotel and lucky to afford to do that once very 6 months. from this a industry was created, timing pay at hotels not nights but pay by the hours. This get worst because of type and lack of intimacy and the lack of money see the couple break up. Now society have a single mum who is on the outer with both her parent and grand parents on back. this rubs of on the the child and the child is subject to fights and mode swings and child starts to have learning difficulties. This is just the tip of the iceberg. This is a small nation Island with a pollution 120 million, Human condition play a hugh part. There has to be a safe net for those on the minimum wages and that net need to be lifted because people are falling on this safety net which is set a ground zero.

There has to be a safe net for those on the minimum wages and that net need to be lifted

I don't disagree with that, the disagreement we do have is that you think money grows on trees and companies and consumers will just pay for it through higher wages and higher consumer prices. I worry that (as experience shows) people will be laid off, even though we were supposed to be helping them.

Money doesn't grow on trees. Money grows from profitable businesses. Governments tax profits. That's where the assistance should come from, and as a side-effect profitable businesses may lead to higher wages if demand for labour goes up enough. Then the people on minimum wages can move on up and not need any assistance.

The Wealthy have are the first to cry poor mouth. They have never got over having a pay wage when told you have to gave up slavery. They cried I will go broke having to pay wages. What Happened ? They more profit then before slavery. Like I said, bean counters know nothing of human condition.

The government is looking for some kind of kick start. Old people don't want to spend money, and don't have a lot. There are not a lot of young people. Construction is not really needed. If anything, Japan has too much infrastructure, and a good bit of it is in the wrong places. Families are already being assisted. Interest rates are lower than a bug's belly.

So how do you stimulate? How do you do it without driving some part of the economy to the wall? Remember that the whole idea is not to burden some sector in the long run just to help another in the short run.

Nessie called it. It is flailing. Doesn't mean it is a bad idea. I think it means that we have run out of ideas. The government borrows money at zero interest and gives it to people to buy something. As that ripples through the economy, it creates knock on effects.

I have a radical idea that is better. Vacation time. One or two more holidays, strategically placed. Of course the problem is that it will impact businesses, who might have to hire one or two more workers. But then people will travel a little more... or take a shopping trip or a trip to an onsen. Maybe it evens out.

An alternative is accelerated depreciation for renewable energy, hybrids and EVs. Hydrogen vehicles. Tax credits for energy saving home improvements. Japan will have to change anyway eventually. Let's do it today.

One thing I hear some governments are trying is paying companies to hire young workers. The payments compensate them for costs of training. Sounds like a pretty good plan. The worker keeps the skills no matter how things pan out in the long run. Companies are leery... for obvious reasons. THe paperwork... oy vey.

Targeted rural rejuvenation efforts might also be good. Tax credits and subsidies for younger people to establish green businesses in rural areas would kill several birds with one stone.