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Japan's household spending sags; jobless rate lowest in two decades

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By TORU YAMANAKA

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data released last week showed consumer prices rose for the fourth straight month in April but it was due largely to higher energy bills.

so the figures are good because we are paying more for power, not because of fair wages or a feeling of content by the general population. So my thinking is the government want good figures, false for us as they are. Suck it up Japan the Dear Leader can vomit these figures as a victory.

2 ( +4 / -2 )

Despite this, they are still talking of raising the consumption tax!

5 ( +6 / -1 )

Like other developed counties, less income and the cost of goods purchased by the young - largest market sector is falling in Japan and the items purchased are cheaper, instant gratification from games and phone apps. They dont want a car - no where to park and no time to use it, cant aford their own homes so or little or no and cheaper furniture and white goods etc, no time for hoildays so no spening at travelagents and locations, a drop in the desire to go to onsens reduces ecomic spend and dispersion of cash, clothes are cheaper thanks to UNICLO etc, less major advances in tech so less item replacement turnover, smaller homes with less space for junk, less golfers skiers etc so less equipment purchased. Not sure how pachinko and there are more and cheaper restaurants, chains.

10 ( +10 / -0 )

It's all smoke and mirrors statistics. While there may very well be less people unemployed and an increase in job vacancies, it does not state what kind of jobs it contracts are available. Most are low paying jobs with semi-permanent contracts offering no security or opportunities for advancement. Furthermore, the reason spending has decreased is not because people are holding onto their money. It is because they have very little disposable income, if any. Smoke and mirrors!

6 ( +7 / -1 )

Well, let's see... there was just an announcement that consumer prices went up, so... any coincidence? And just because more people are being forced to work at Lawson's or delivering newsletters doesn't mean they're getting GOOD jobs that they can live off of with taxes and rates increasing.

4 ( +6 / -2 )

"Japan's prospects have been improving"

What economists say: Breathlessly reported in the media like it's the voice of God. Put some boots on the ground and ask some average shoppers how they feel about the economy or their prospects for the future. The picture won't be nearly as rosy. 40% in irregular jobs, stagnant wages despite a) corporations sitting on mtns. of cash and b) impotent pleading from the government that they raise pay. All the while the government is still mulling another regressive sales tax hike.

5 ( +6 / -1 )

Be wary ladies and gents the official estimates in both japan and america continually be undercut when actual figures come out - things dont seem right in the major economies

5 ( +5 / -0 )

At the end of the day, after the government has taken its cut in tax, and with the high price of apartment rents and food, there is not a lot left over. In the 70's and 80's, there were bonuses. People had money to spend. Nowadays, only government workers get bonuses. Heaven knows why. Profit sharing?

How about some austerity in the government? Cut bonuses, cut perks, cut "business trips," reduce the number of government workers drastically?

1 ( +4 / -3 )

Might seem like a ridiculous idea but BOJ can try monetary easing by depositing 100000 yen p.a. Into each taxpayers account so that we can spend some money

2 ( +3 / -1 )

What many people have is temporary jobs.

They are discriminated, harrassed and treated like comsumables.

Of course they can't take out housing loans.

Where did they take statistics in the first place?

Who did they ask?

What exactly are the quetions?

Must be tricky questions like:

Do you have a job? (whether full-time employee or not, however many days a week)

Yes:85%      No:14%        Other:1%

6 ( +6 / -0 )

A new chain izakaya opened a branch down the road from me. They're paying 800yen an hour. You could pull a 12 hour shift and not make 10,000 yen. This is not an uncommonly low rate either I feel.

5 ( +7 / -2 )

The labour ministry separately said on Tuesday that the ratio of job offers to job seekers in April was at a 43-year high of 1.48, meaning there were 148 offers to every 100 job hunters.

Going by my junior high school economics means as demand (companies) surpasses

supply (job seekers) it will translate in an increase in the hourly rate since the competition

for job seekers would be fierce forcing companies to raise the hourly rate to entice job seekers

but I don't see that happening the hourly rates are slave-like.

Maybe the job outsourcing companies are keeping a large chunk of the salaries they get from

companies to themselves and paying out peanuts to the those actually doing the job.

Without legislation to put the exploitation in check the slavery is going on unchecked.

5 ( +6 / -1 )

The labor market is tight as separate data on Tuesday showed the nation's jobless rate stayed at 2.8% in April, the lowest in more than two decades.

The labour ministry separately said on Tuesday that the ratio of job offers to job seekers in April was at a 43-year high of 1.48, meaning there were 148 offers to every 100 job hunters.

These stats are out of this world (literally). Unlike many on here, I think successive J govts should be given 'some' credit for this performance as employing a vast majority of ppl (including the 'near-unemployable') is no mean feat. Keeping ppl busy, socialised etc is important and does have a positive impact on other aspects (crime rate, social harmony, health care etc).

Problem is life is not only about numbers and j govts have been resting on their laurels/these stats for far too long believing having 'a' job was good enough for a vast majority of ppl. No longer the case am afraid. Ppl actually do mind the "what type of job, for how much, how many hours' etc aspects after all. Hope 'a' J govt will sooner rather than later see the light on those issues, be bold and build on these strong stats even if it means less flattering numbers. Less jobs and a 5-6% unemployment rate isn't necessary a bad thing provided the ppl who are no longer working (retirees & others) do get some help/assistance and employees share the extra $ through higher salaries and better working conditions.

3 ( +3 / -0 )

consumers kept a tight hold on their purse strings despite years of government efforts to boost spending.

It has occured to some of us that the tight hold on purse strings is BECAUSE OF government efforts to boost spending, which have not worked at best, but may indeed be contributing to the malaise.

Still, private consumption, which accounts for more than a half of Japan's GDP, remains lacklustre as cash-rich firms have been stingy with pay hikes.

The government should enact reforms so as to see free market forces applied broadly in Japan, then we'll see if companies are still "stingy" with pay hikes.

If companies have to compete amongst one another to secure labour, then those with the best business models will hike wages, and the rest will collapse, freeing up economic resources for application elsewhere. It's called progress.

0 ( +1 / -1 )

Akshay - in about 2008, the government gave everyone (including foreign residents!) 12000 yen in an attempt to boost the economy and it had zero effect.

Dr Lucifer - hourly rates have been going up in Tokyo over the last few years. 900 yen an hour commonly used to be the minimum rate for jobs requiring limited skills, now it's usually 950-1000 yen. Still much too low though.

0 ( +0 / -0 )

more jobs than there are people to fill them

this is only good if you're desperate to find a job; if you use your brains you start to realize that the country doesn't have enough people to work at all the existing businesses.

the number of jobs to number of people ratio will keep on growing as it has, when the majority of the working elderly population retires or dies there's going to be major infrastructure trouble unless automation completely takes care of things within the next 5 or 10 years.

1 ( +2 / -1 )

Japan has it's own way of reporting employment/unemployment statistics and they are out of line with reality. They do not report about the "underemployed".

If you work one hour per week, you are not counted as being unemployed.

People scratch their heads and wonder why with all the so-called positive signs, why folks don't spend any money, it's a no brainer when such a large portion of the population live pay-check to pay-check.

> A new chain izakaya opened a branch down the road from me. They're paying 800yen an hour. You could pull a 12 hour shift and not make 10,000 yen. This is not an uncommonly low rate either I feel.

No need to "feel" it's a fact of life down here. In fact many would be happy to take the job.

1 ( +1 / -0 )

Pretty much everyone here is spot on.  I agree wholeheartedly with everyone- you took the words out of my mouth.

Now let me say this to the Japanese gov: you deserve this.  You have mooched off the public and have given them no prospects-just expect them to work like serfs for the daimyo of the prefecture and the Abe shogunate. People have no hope nor money and they are pessimistic about the future. You really want to help Japan and get consumer spending rolling again? Ok. Here's how you do it.

raise the minimum wage. In the US there is the fight for 15. So lets have the fight for 1500 here.

force companies to pay HEAVILY for overtime. For every hour of overtime, people get double the pay per hour. If a person is asked to come in on the weekends(or for a sixth day in the week), the company, regardless of how big, must pay a daily wage of 100,000 yen per worker for that day- 50,000 if they go home before noon.

force ALL companies to pay for shakai hoken as that is an added expense that consumers must spend on if their companies don't provide it. You employ someone, you pay for their insurance. Simple as that. Same goes with transportation.  Transportation should be a company expense, not a consumer expense.

There are over 10 million homes across Japan that are vacant. Have the prefectural governments buy these homes, reform them, and give them away for free to any couple with 2 or more kids. This is a better way to spend money than fixing roads that don't need to be fixed and building bridges to nowhere. This also puts money into people's pockets as they now don't have a rent or lease expense. Not to mention THAT will definitely encourage people to have children- another major problem that is tied to consumer spending- since if there are no kids then there will be no future consumers.

Get rid of the racket that is required to purchase and own a car. Socialize the driving schools so that they are free instead of 300,000 yen like they are now. Get rid of the road tax in the prefectures outside the major cities, and reduce the price of car registration. Also do away with the highway tolls so people can actually afford to revitalize the countryside by going there and spending their money.

In Japan,  the unneccessary expenses build up so that people have very little money to spend on luxury goods. If you want people to spend more, you have to revitalize their wallets first.

2 ( +4 / -2 )

Disposable income...hah, what a joke. Ain't had that for about 3 or four years. Michi no eki for veggies, and camping for holidays. Bars, haven't seen the inside of one for years, only liqour mountain. Just a few years ago I was eating out 3 nights a week. But then, 1.5 million yen for two melons does seem as if I may just be having a low peak, and others out there are doing just fine.

4 ( +5 / -1 )

raise the minimum wage. In the US there is the fight for 15. So lets have the fight for 1500 here.

You have to understand the demographics of Japan. Tokyo the minimum needs to be more like 2000 per hour and adjusted regionally.

force companies to pay HEAVILY for overtime.

Easier said than done, it's not the problem of paying overtime, it's the problem of management.

force ALL companies to pay for shakai hoken 

You realize you are advocating a socialist society with many of your suggestions here. Companies do already pay for shakai hoken, even if the person is on a contract.

There are over 10 million homes across Japan that are vacant. 

The actual number of vacant houses and apartments in Japan is closer to 4 million and expected to rise to 5 million according to Kyodo.

Get rid of the racket that is required to purchase and own a car. Socialize the driving schools so that they are free instead of 300,000 yen like they are now. Get rid of the road tax in the prefectures outside the major cities, and reduce the price of car registration. Also do away with the highway tolls so people can actually afford to revitalize the countryside by going there and spending their money.

Where do you get the idea that it is required to own a car? A huge percentage do not, and there is no need for one living in Tokyo. Maybe it's your company that forces you, but most do not.

Also, it tells me much that you are unaware that there is NO requirement to go to a driving school. People do it because of the sheeple instinct and close to 100% probability of getting the license that people go to drivers school.

Getting rid of the road tax...so where is the money going to come from to replace the pot hole on the road in my city?

I am stopping there..

-3 ( +1 / -4 )

Almost everyone I know lives paycheck to paycheck so why would anyone consider that we want to spend more money? Only way most can pull a decent salary is to work insane overtime. If wages were increased, I'm certain there would be more people willing to spend their money or less essential items to promote growth.

1 ( +1 / -0 )

The actual number of vacant houses and apartments in Japan is closer to 4 million and expected to rise to 5 million according to Kyodo.

Not what I read in that other JT last Dec.

"According to government estimates there are 8 million residences in Japan with no one living in them, a number that Bloomberg reports will increase to 20 million by 2033"

http://www.japantimes.co.jp/community/2016/12/03/how-tos/abandoned-buildings-still-house-problems/

2 ( +2 / -0 )

raise the minimum wage

I agree with the ends, but not with the means. 

Look, raising the minimum wage is equivalent to making it illegal to hire staff whose expected productivity is less than that minimum wage level.

To help the needy we should do it through other means, such as some variation of a guarantee minimum income. The benefit of such is that it would remain legal for low skilled workers to be employed - thus ensuring they have that opportunity for valuable job experience and a chance to move up the ladder. Once they do, they will no longer need that guaranteed minimum income from the government.

But making it illegal for them to work from the outset puts them on a path to long-term state dependency.

Is assisting the needy not one of the reasons we pay taxes for? 

I don't think companies should be "forced" to pay, nor can we ensure that they would (as they can opt to invest in automation instead of the low-skilled worker).

All ideas about "forcing" companies to do anything need to be carefully considered to see how behaviour would change as a result of them. If we try to take shortcuts, I fear all that will happen is companies will reduce compensation in other ways to compensate for the extra costs that government mandate they pay.

I believe the best way to force companies to improve is to subject them thoroughly to free market competition - make them fight to become more efficient, and thus provide more value to the community. When only high-value add companies remain, I believe wage levels would be higher, across the board.

-1 ( +0 / -1 )

Look, raising the minimum wage is equivalent to making it illegal to hire staff whose expected productivity is less than that minimum wage level.

Doesn't matter. Humans deserve a base amount of money for their time no matter what. If a business can't afford that, then the business is not viable and needs to shut down.

0 ( +2 / -2 )

You have to understand the demographics of Japan. Tokyo the minimum needs to be more like 2000 per hour and adjusted regionally.

Fine.  I didn't say that Tokyo has to have 1500 as a minimum wage; that Japan should have one, BUT even if it did, it would still be better than now..

You realize you are advocating a socialist society with many of your suggestions here.

So what? You prefer the status quo with the fat cats getting richer and others on 200000 a month? A bit more socialism would be fine by me.

Companies do already pay for shakai hoken, even if the person is on a contract.

Your posts tell me you have NO idea of life in the tokyo area. MOST companies here DONT pay it at all. Maybe in Okinawa, but not here.

The actual number of vacant houses and apartments in Japan is closer to 4 million and expected to rise to 5 million according to Kyodo.

Well, according to Yomiuri According to the 2008 survey, there were about 7.57 million unoccupied homes across the nation, including apartment units. The rate was at its highest ever at 13.1 percent - See more at: http://newsonjapan.com/html/newsdesk/article/102567.php#sthash.uocWdqDa.dpuf

And THAT was in 2008

The Vacant Houses Special Measures Act, scheduled to take full effect on May 26, marks a belated attempt to deal with the problem of more than **eight million vacant houses (nearly 14 per cent of the total housing stock).** - See more at: http://newsonjapan.com/html/newsdesk/article/112574.php#sthash.aBAKU49U.dpuf

Getting rid of the road tax...so where is the money going to come from to replace the pot hole on the road in my city?

Your city tax. That's where its paid from anyway. How do you think they fix the potholes in TOKYO? Like YOU said

A huge percentage do not, and there is no need for one living in Tokyo.

Where do you get the idea that it is required to own a car?

Where did you get the idea that I said it is required to purchase and own a car? I said "Get rid of the racket that is required to purchase and own a car" The requirements you need to fulfil in order to get a car.

Also, it tells me much that you are unaware that there is NO requirement to go to a driving school.

I don't know about Okinawa, but in the Tokyo area there is. I have two foreign friends who were told that if they didn't already have a license they would be REQUIRED to go to school to get one- unless the law is different for Japanese and foreigners. 

People do it because of the sheeple instinct and close to 100% probability of getting the license that people go to drivers school.

Try getting one without going to the school. I did. I had another license and they still gave me hell. Finally, I put in a call to the British Embassy and threatened to lodge a formal complaint. The Japanese woman on the other end begged me to go back to the DMV one more time and they gave it to me automatically.  That's how I got my license.  Even with another license they still won't give it to you. Its a racket.

-1 ( +0 / -1 )

If jobless rate is low, but people aren't spending

0 ( +0 / -0 )

Workers population in Japan is decreasing year by year.

2 ( +2 / -0 )

Humans deserve a base amount of money for their time no matter what. 

You are confusing the ends with the means. I agree that the community should ensure that everyone has enough money. 

If a business can't afford that, then the business is not viable and needs to shut down.

If the business is shut down and the worker is subsequently out of a job, how does that help that worker? (And the tax payers who now need to fully support the worker?)

There is a right way and a wrong way for businesses to go out of business. It's better that businesses die by free market competition that I prescribe, because it implies that more successful competitors will create new employment opportunities.

-1 ( +0 / -1 )

You are confusing the ends with the means.

No, you are. I'm saying that regardless of the work, each person's time has a base value that should be legally protected.

I agree that the community should ensure that everyone has enough money.

I'm saying the government should, not the community.

If the business is shut down and the worker is subsequently out of a job, how does that help that worker?

If the business is not viable to the point that cannot afford to pay people for it's time, then it's not a viable business. The employees will be able to find jobs at companies that have a viable business plan.

There is a right way and a wrong way for businesses to go out of business.

Any business that doesn't have a valid business plan should either be forced to find it's own way of infusing cash, or go out of business. Abusing its employees is not a reasonable option.

It's better that businesses die by free market competition that I prescribe, because it implies that more successful competitors will create new employment opportunities.

It's better that businesses not be able to prop themselves up artificially by underpaying their employees, as they create artificial competition for businesses that have a viable business plan.

-2 ( +0 / -2 )

This is what happens when you shift the tax burden from the rich to the middle class and working people, which is exactly what the govt has been doing, under the banner of "reform."

So, rescind the corporate tax cut. Corporations don't need it: they were earning all-time record high profits before it was introduced. Rescind also the last few consumption tax hikes. I predicted a few years ago these would hurt consumption, and thus put a drag on the economy overall.

Don't reinstate any more taxes on consumers until the economy hits its growth targets.

1 ( +2 / -1 )

It's simple, the economy is based on consumption, meaning you need people to spend. The problem is people need to have a livable wage to spend so guess what - people aren't spending. The people with all the money are sitting on it which is evident here:

Still, private consumption, which accounts for more than a half of Japan's GDP, remains lacklustre as cash-rich firms have been stingy with pay hikes.

The solution, increase wages and give people more time to spend.

0 ( +1 / -1 )

I'm saying the government should, not the community.

The community elects and funds the government. It is run by us, not aliens with infinite money.

The employees will be able to find jobs at companies that have a viable business plan.

If that were true they'd have taken such jobs in the first place, rather than the lower paying job. In reality such jobs don't exist, so you have made life worse for both worker and taxpayer.

But at least you are satisfied with the punishment of the poor business. Congrats but thanks for nothing

-1 ( +0 / -1 )

The community elects and funds the government. It is run by us, not aliens with infinite money.

The community elects and funds the government so it will take care of the people, protecting them from employers who would underpay them if allowed to do so.

If that were true they'd have taken such jobs in the first place, rather than the lower paying job. 

Incorrect. If the government allows companies to underpay staff, it creates a market of such salaries, meaning staff have to take those salaries if they are to work at all. By allowing underpayment, the government ensures other companies will not pay more than they have to.

-1 ( +1 / -2 )

protecting them from employers who would underpay them if allowed to do so.

Incorrect. We do not pay taxes so that people can enjoy being fired due to government intervention, rather than enjoy employment for a wage mutually agreed with their employer. A job which they can quit if they are unhappy with.

If the government allows companies to underpay staff, it creates a market of such salaries

Incorrect. The government merely allows to exist the market that would exist anyway. Destroying such a free market serves no desirable purpose.

meaning staff have to take those salaries if they are to work at all.

Nonsense. Staff are not obliged to take or keep those jobs if they don't want them. They can exit the market by themselves, without the government alleviating them of their own personal responsibility and dignity.

By allowing underpayment,

There is no underpayment, only payment as agreed between the employer and employee.

There is no reason to insert the government between these free market actors.

Rather it is more appropriate and effective in terms of useful outcomes if the government tops up income for those workers who earn what is deemed 'too little'. Both employee and employer benefit from the provision and supply or labour, and tax payer support required for the low income earner is minimized. Everyone is a winner, whereas you would make all parties losers.

-2 ( +0 / -2 )

Is the "tight hold of the purse strings" expression helpful? Judging from the huge fall in the historic Japanese saving rate, most (younger) people will be spending pretty much all the disposable income they have.

0 ( +0 / -0 )

I think that if the labour shortage we keep reading about is real the minimum wage should be raised until the shortage disappears. This will drive inefficient companies out of business and raise productivity, something the government says it is in favour of.

0 ( +0 / -0 )

I think that if the labour shortage we keep reading about is real 

This is an important point. Are labour shortages real, or is it just the case that employers need to offer higher wages to secure workers? 

The workforce in Japan is shrinking no doubt, but that doesn't mean that no one is available to work if the price is right for them.

I saw an example of this with regard to child care workers on TV recently. In the segment, former child care workers were asked how much extra they'd need to be paid before they'd take the job again. I recall some were happy to work for 50,000 yen extra a month, but for others they'd not do so for less than 100,000 yen extra.

So I believe it's not a shortage so much as it is the price signals are broken. If bureaucrats weren't imposing restrictions on wages paid for child care workers, I don't think child care worker shortages would persist to the extent that they do.

the minimum wage should be raised until the shortage disappears. This will drive inefficient companies out of business and raise productivity

I am skeptical, because the minimum wage is a very blunt instrument that applies across the board, whereas the degree of shortages differs by type of work. 

For example you might hike and suddenly have an abundance of people willing to work at McDonalds but even greater shortages in other areas. So you hike again, and then suddenly McDonalds goes out of business, and so on and so on.

So hiking would, I agree, drive some businesses out of business, but that would also result in workers out of jobs, and not necessarily resolve worker shortages. If this were how it played out then I'd expect no boost to productivity.

Government could make for higher productivity by alleviating the burdensome regulations imposed on so many businesses, so that they can focus on creating value for their customers, rather than jumping hoops to satisfy meaningless regulatory requirements. 

And additionally government could eliminate privilege for favoured groups such as farmers, by subjecting those protected industries to competition from other players. That would force them to become more productive to survive, while also ensuring lower prices for consumers (in turn enabling them to have more money to spend on other things). Lower prices would benefit low income workers greatly.

1 ( +1 / -0 )

As many posters here have pointed out, it's really very simple: people do not have the money to spend.

Low unemployment does not mean more discretionary income.

2 ( +2 / -0 )

Japan currently has 40 percent of their workforce working part time workers with mostly no benefits. In a decade, part time workers will be about half the working population. No wonder majority of these people have little to spend on other than the basic needs. Sure, Japan's economy is expanding slightly, but at the high expense of these low disposable workers. The gap between the poor part time workers and and rich will continue to expand.. I am not sure what young people of Japan has for their future. Abe government is not looking for solutions to the problem.

1 ( +1 / -0 )

Incorrect. We do not pay taxes so that people can enjoy being fired due to government intervention, rather than enjoy employment for a wage mutually agreed with their employer. A job which they can quit if they are unhappy with.

Weird way you've tried to phrase your argument, but it's incorrect. The government is elected by the people to serve the interests of the people. The interests of the people are served by protecting the people from unethical businesses and industry. Without a minimum wage, businesses will drive the salary down for the entire market, making your idea that they can quit nonsensical, as there is no purpose achieved by quitting if all other jobs in the market are at the same low salaries. People who are working at miminum wage do not have the freedom of being able to not work while they look for higher-paying jobs that don't exist. They have to work all the time because they are already working hand-to-mouth.

The government merely allows to exist the market that would exist anyway. Destroying such a free market serves no desirable purpose.

If the market will exist anyways, then the minimum wage doesn't hurt the market. And having a controlled market prevents the market from taking advantage of those who are desperate to cover their base needs of clothing, housing and food.

Nonsense. Staff are not obliged to take or keep those jobs if they don't want them. They can exit the market by themselves, without the government alleviating them of their own personal responsibility and dignity.

And what, live off their savings? You seem to be someone distanced from the reality of what it's like to work for minimum wage. People in that position don't have the freedom to spend time off work to look for something better. It's not like they have savings.

There is no underpayment, only payment as agreed between the employer and employee.

Underpayment is when companies try to pay someone less than what the basic amount their time is worth - aka the minimum wage.

There is no reason to insert the government between these free market actors.

Yes there is - protection of those at the bottom of society. The ones who need protection the most, from employers who would seek to give them the least.

Rather it is more appropriate and effective in terms of useful outcomes if the government tops up income for those workers who earn what is deemed 'too little'.

No, it's more appropriate and effective if businesses that have such a weak business plan that they cannot afford to pay their workers the minimum wage are left to go out of business.

-2 ( +0 / -2 )

protecting the people from unethical businesses

What is ever ethical about government stepping in between two parties who want to make a mutually acceptable agreement?

Without a minimum wage, businesses will drive the salary down for the entire market

Incorrect. The market is set by buyers and sellers, not by buyers alone. If you want to buy a Ferrari for one yen, you will find no willing sellers, and the only transacted prices will be higher. The same is true in the labour market. Misunderstanding of this point is why your belief is misplaced.

the market will exist anyways, then the minimum wage doesn't hurt the market. 

You misunderstood this also. The market exists without government, but government interference can certainly serve to destroy it through price controls / regulations.

less than what the basic amount their time is worth

Each individual knows how much that is, why would you presume that government knows better?

protection of those at the bottom of society

This can be achieved through something like a guaranteed minimum income. Your idea would potentially result in people being out of work entirely, losing the precious chance to gain work experience so as to boost their chances of moving higher up the wage ladder.

Just how does that protect them? It potentially makes them in need of even more protection, and you say nothing about how you would then deal with their situation. It seems you want to put in a wrong policy and assume the best outcome possible. That's not protection.

0 ( +0 / -0 )

What is ever ethical about government stepping in between two parties who want to make a mutually acceptable agreement?

A minimum wage job is not two people negotiating a salary. It's the employer saying 'we'll pay you this much', and the job hunter either accepting it or not. If there are no higher paying jobs, the employee either takes the job, or remains unemployed, and for those who do not have the financial freedom to be unemployed, it comes down to taking the job or being homeless. Hardly a mutually acceptable agreement.

So the government stepping in and protecting the people, aka doing what it is supposed to do, is entirely ethical, to prevent employers from dropping salaries below what one could be reasonably expected to work for.

Incorrect. The market is set by buyers and sellers, not by buyers alone. If you want to buy a Ferrari for one yen, you will find no willing sellers, and the only transacted prices will be higher. The same is true in the labour market. Misunderstanding of this point is why your belief is misplaced.

You say that, but if the seller is selling oxygen, and the buyer is in a vacuum, then the price is whatever the seller wants it to be, because the buyer will die without it.

The same is true of the labor market. If someone will be homeless and foodless without the job, they will take the job even at an abnormally deflated salary. Misunderstanind of this is why your belief is misplaced.

You misunderstood this also. The market exists without government, but government interference can certainly serve to destroy it through price controls / regulations.

And again, you misunderstand this also. If the business plan is so poor that the business cannot survive without providing it's employees with a base minimum for their time, then the business is not viable, and society is better off if the business fails.

Each individual knows how much that is, why would you presume that government knows better?

Because without government protections, business will abuse the employees, which is why we need government protection, especially for those at the bottom echelons of society, who don't have the power to fight back.

This can be achieved through something like a guaranteed minimum income. Your idea would potentially result in people being out of work entirely, losing the precious chance to gain work experience so as to boost their chances of moving higher up the wage ladder.

A guaranteed minimum income? You mean like a minimum wage? Or do you mean the government should be paying the salaries that companies aren't paying. If that's the case, what's the incentive for people to work? Why not just collect their minimum income from the government? And you realize that money is going to have to come from somewhere, right. Where? Taxes - on the very businesses who aren't paying the employees. So the companies end up paying either way.

If a company fails due to a poor business plan, another one with a viable business plan will spout up to replace it.

It seems you want to put in a wrong policy and assume the best outcome possible.

That's exactly what you are saying with your fallacy that there doesn't need to be a minimum wage.

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If Japan is to solve its demographic problem, it will have to tackle the labour issue. Japan needs to narrow the gap between over-protected permanent workers and under-protected non-permanent ones. That coddling one section of the workforce does not serve Japan’s interests well. Simply making life less cushy for permanent workers is not likely to do any good on its own. The big push should be on improving the wages and conditions of temporary workers. It should be made far easier for them to migrate to permanent jobs and for workers of all descriptions to move more freely between companies.

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It's the employer saying 'we'll pay you this much', and the job hunter either accepting it or not. 

You are right about this, but don't then draw the right conclusions. Note that if the wages on offer are too low, no one will accept those jobs. In response, the employer has to either not hire staff, or offer better conditions to attract workers.

it comes down to taking the job or being homeless.

This is not true of my plan, because (as in my original comment, which you may care to revisit) there would be a guaranteed minimum income in place, funded by tax payers, acting as a safety net.

The minimum wage is not a safety net. It is a price control, and that may negatively effect workers who are no longer able to be employed, as a result of it. And then what are you going to do? You say nothing of it. It offers those people no security at all.

You say that, but if the seller is selling oxygen, and the buyer is in a vacuum, then the price is whatever the seller wants it to be, because the buyer will die without it.

You have the roles reversed, it seems. The job seeker is the labour seller, and the employer the labour buyer, not the other way around. At least this is true in my scheme, because the worker can always just receive the guaranteed minimum income if the work is not of any value at all.

In your scheme, how would you protect the low income earners who would lose their jobs due to labour price restrictions imposed by government?

the business is not viable, and society is better off if the business fails.

This is not true. If a business offers wages in return for labour, and an employee supplies labour in return for those wages, both benefit from the deal, and the tax payer benefits as well because those wages need not be made up by the tax payer to hit the guaranteed minimum income level. Everyone wins.

Everyone loses under your scheme, for those workers who no longer can be legally employed due to the price control. For those workers who do get a higher minimum wage, someone else loses - be it the consumer or the business or other businesses paying similar wages and their consumers.

It's fairer for the costs to be spread evenly across society through a guaranteed minimum income scheme.

A guaranteed minimum income? You mean like a minimum wage? 

You can google it I think, but the key point is that the former is a tax payer funded safety net to protect the most vulnerable in the community, whereas the minimum wage is not.

what's the incentive for people to work? 

It is just a matter of correctly setting the paramaters of a guranteed minimum income to ensure that there is an incentive to work, rather than just receive the guranteed minimum income - e.g. the worker gets more take home pay than the non-worker. There is also the non-financial incentive gained through obtaining work experience and potentially new skills as a result, as an incentive.

And you realize that money is going to have to come from somewhere, right. Where? Taxes 

Absolutely - why else should we be paying taxes if not to help the most vulnerable in the community? That should be one of the top priorities of any government budget.

I see you want to pin that funding on companies too through company taxes. Don't you think we tax payers should pay to support our vulnerable peers in the community?

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You are right about this, but don't then draw the right conclusions. Note that if the wages on offer are too low, no one will accept those jobs.

And that's where you are drawing the incorrect conclusions. If there is no protection against abnormally low wages, all employers will offer those wages, and people will either accept them or have no way to feed, house, and clothe themselves. The balance of power is weighted heavily to the employer, which is why employees need protection.

This is not true of my plan, because (as in my original comment, which you may care to revisit) there would be a guaranteed minimum income in place, funded by tax payers, acting as a safety net.

I already addressed this. And I disagree that the government should be providing corporate welfare for companies with untenable business plans, simply because they cannot afford to pay their staff a base minimum salary. Companies should be forced to cover their own costs, not spread them out to all tax payers. It's a company's responsibility to have a viable business plan.

The minimum wage is not a safety net. It is a price control, and that may negatively effect workers who are no longer able to be employed, as a result of it.

Corporate welfare should not be provided to companies with non-viable business plans.

You have the roles reversed, it seems. The job seeker is the labour seller, and the employer the labour buyer, not the other way around.

You have the roles reversed. The job seeker is the job buyer, the employer is the job seller, not the other way around.

If a business offers wages in return for labour, and an employee supplies labour in return for those wages, both benefit from the deal, and the tax payer benefits as well because those wages need not be made up by the tax payer to hit the guaranteed minimum income level. Everyone wins.

No, the people losed, as they are forced to pay for corporate welfare for companies that don't have a viable business plan, and cannot afford to pay their staff a base minimum salary.

It is just a matter of correctly setting the paramaters of a guranteed minimum income to ensure that there is an incentive to work, rather than just receive the guranteed minimum income - e.g. the worker gets more take home pay than the non-worker.

And what about those who are happy with the guaranteed minimum income? Society should be forced to pay for them in order to provide corporate welfare to companies that have such a poor business plan that they cannot afford to pay salary?

Absolutely - why else should we be paying taxes if not to help the most vulnerable in the community?

Exactly, and we can help them by ensuring that employers don't abuse their desperation by driving salaries down to a working poor level.

I see you want to pin that funding on companies too through company taxes. Don't you think we tax payers should pay to support our vulnerable peers in the community?

No, I think that companies that make profit through the labor of workers should be forced to support their workers that make them those profits. If the company business plan is not able to do that, then it's not a viable business plan, and is chaff that needs to be separated from the wheat.

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If there is no protection against abnormally low wages, all employers will offer those wages

No they won't, because they would fail to attract workers.

In the absence of a minimum wage, it's not the case that businesses would be able to offer one yen per hour salaries and successfully attract workers. I can't imagine that anyone would work for that, and therefore all such businesses would shortly go out of business, or hike wages to a level attractive enough to secure labour.

I already addressed this.

You addressed it but didn't explain how your scheme would result in superior outcomes for the community as a whole - which surely should be the objective.

And I disagree that the government should be providing corporate welfare for companies

It's not corporate welfare to provide a safety net for all members of the community. It's a social welfare policy. You have this wrong because you incorrectly think that businesses could successfully offer low wages and still attract workers, which is not the case. See the situation with child care workers. There is a shortage of workers because the wages are not high enough to attract staff. The same applies for businesses offering jobs at lower wage levels. They can offer low wages, but there is no guarantee whatsoever that low wages will attract workers. You should properly address this point.

You have the roles reversed. The job seeker is the job buyer, the employer is the job seller, not the other way around.

Does this really require argument? The buyer is the one who pays - and employers pay wages to employees, not employees paying employers.

And what about those who are happy with the guaranteed minimum income?

Just look at the overall system. The vast majority of people want the dignity and independence that having a job provides. Concerning oneself with extreme cases that have minimal impact to the system overall is not productive.

I think that companies that make profit through the labor of workers should be forced to support their workers 

That's what agreed wages represent, including other types of company contributions to employee pension schemes and such. Do you think it should be illegal for businesses to earn money at all, after paying wages and other costs? Without a profit incentive, there would be no incentive to operate at all. Then no one would be employed. You can't have good jobs without businesses making profits.

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No they won't, because they would fail to attract workers.

That's incorrect. Companies will each go as low as they can, therefore creating a market in which there are not higher paying jobs for people to choose instead. Therefore workers are faced with the option of taking the bad salaries or being unemployed.

In the absence of a minimum wage, it's not the case that businesses would be able to offer one yen per hour salaries and successfully attract workers.

No, but salaries would drop down to the lowest point at which they could attract workers, and that would be well below what a person's time should be guaranteed as. Companies are not going to pay higher than they need to, and as long as other companies are paying as low as they are, they have no incentive to pay their people a base minimum.

You addressed it but didn't explain how your scheme would result in superior outcomes for the community as a whole - which surely should be the objective.

People who have more income spend more money allowing more people to be employed for higher wages who then have more income to spend...

With your idea, the money all goes to company profits, and we all know trickle-down economics do not work. Your idea results in further income imbalances, less money in the pockets of the people, and therefore less money for employers to have to pay better salaries.

It's not corporate welfare to provide a safety net for all members of the community.

If a person is working full-time and do not have enough to live, then their employer isn't paying them what their time is worth. If they have to receive money from the government, the government is subsidizing their salaries. That's corporate welfare. It's the government paying because a company isn't.

Does this really require argument? The buyer is the one who pays - and employers pay wages to employees, not employees paying employers.

Employers pay money. Workers pay time. The currency is different, but both are paying.

Do you think it should be illegal for businesses to earn money at all, after paying wages and other costs? Without a profit incentive, there would be no incentive to operate at all.

Not at all - I'm a capitalist. I run two businesses, and I wouldn't do it if there was no profit incentive. But the free unregulated market is just as failed a system as communism. Both are extremes, just at opposite ends. Financial incentive is a requirement for advancement of society, and worker protection is a requirement for protection of society. it's important to find a balance. Companies need to be allowed to make profits without a cap - as long as they are also taking care of their workers at an equivalent rate. Any company making profit but is paying so little that their employee needs government support to survive, is a company that is basically taking taxes for profits, and is a failed business plan.

-2 ( +0 / -2 )

Companies will each go as low as they can, therefore creating a market in which there are not higher paying jobs for people to choose instead.

This is clearly false, as demonstrated by the myriad existence of jobs that pay far far more than the minimum wage. Employers could offer the minimum legally permissible but evidently they do not - there exist relatively high wages for some jobs precisely because the people able / willing to perform those jobs is limited. And that is why those wages are higher - not because some government officials mandated the wage level.

People who have more income spend more money allowing more people to be employed for higher wages who then have more income to spend...

But to the extent that higher wages eat into profits, the higher the likelihood of jobs being lost. People do not have income when they have no job. You need to address how your proposal would deal with this, rather than falsely assuming that there would be no job losses.

Employers pay money. Workers pay time. 

No employer in business to make profits pays wages with the mere expectation that the payee 'pay time'.

Wages are paid not for time but for the provision of a service called labour/work.

Do either of your businesses pay wages to an employee besides yourself?

0 ( +0 / -0 )

One more thing with regards to the 'unregulated' free market thing - there are certainly types of regulation that I condsider are beneficial to the community, but price controls are simply not one of them. The reason being that such controls lead to supply / demand imbalances. Something that Japan offers many examples of. Wage levels per job type are just another type of price.

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This is clearly false, as demonstrated by the myriad existence of jobs that pay far far more than the minimum wage.

Not jobs that are at the minimum wage level. Those jobs are unskilled labor, and the employers already have the wages as low as they can legally get them. If your premise were true, there would be no jobs at the minimum wage, because no employees would ever take jobs at that low a wage.

Employers could offer the minimum legally permissible but evidently they do not

Again, demonstrably false. There are plenty of minimum wage jobs out there.

But to the extent that higher wages eat into profits, the higher the likelihood of jobs being lost.

Only for companies with non-viable business plans. And we should not be giving corporate welfare to companies with such business plans. They should be let to fail.

People do not have income when they have no job. You need to address how your proposal would deal with this, rather than falsely assuming that there would be no job losses.

I've never said there will be no job losses, what I've said is that people will get jobs at places that have viable business plans.

Let's say for example I run a donut shop. I sell my donuts at 30 yen. At this salary, I can only afford to pay my employees 300 yen/hour. The government then says minimum wage must be 500 yen/hour. I then either raise the prices of my donuts to 50 yen, or I go out of business. If people will not pay 50 yen for donuts, then donuts are not a viable business plan, and donut shops will stop existing. If people want donuts enough, they will be willing to pay 50 yen for donuts, and donut shops will continue to exist. If they don't want donuts that much, then the donut shops will go out of business, leaving an open business front. In steps in an ice cream shop which can sell ice cream at a dollar, and afford to pay 500 yen/hour for their staff. This is a viable business plan, and the business succeeds.

The market will adjust to the circumstance.

No employer in business to make profits pays wages with the mere expectation that the payee 'pay time'.

And yet, that's what the employees are paid for. The amount their time is worth is dependent on the level of their skill, the demand for that skill, and the degree to which they can produce in the given time. But time is exactly the currency of employees.

Wages are paid not for time but for the provision of a service called labour/work.

Which takes time - time that the employee is not doing something for themselves, but is rather committed to the employer.

Do either of your businesses pay wages to an employee besides yourself?

Yes. We have multiple staff at each business.

-3 ( +0 / -3 )

One more thing with regards to the 'unregulated' free market thing - there are certainly types of regulation that I condsider are beneficial to the community, but price controls are simply not one of them. The reason being that such controls lead to supply / demand imbalances.

No, a lack of regulation leads to imbalances. Government controls keep things in balance - though I do agree that there are circumstances in which the government can go to far.

-2 ( +0 / -2 )

Those jobs are unskilled labor, and the employers already have the wages as low as they can legally get them.

OK, so you are talking strictly about minimum wage jobs only (a type of job that exists because of the minimum wage level in the first place), and you are thinking those jobs would pay lower wages were it not for the minimum wage level.

But the jobs right on the minimum wage level only exist because a) those jobs are considered viable by the employers at that wage level, and b) people are willing to work for those wages. 

Then you want to interfere to hike the agreed wage level. 

How many people would have to be made redundant before you'd say the minimum wage level had been hiked too far? And what are you going to do to provide security to the people unemployed in the process?

If your premise were true, there would be no jobs at the minimum wage, because no employees would ever take jobs at that low a wage.

My point was that supply and demand results in most wages being at higher levels than the arbitrarily set minimum wage level anyway, but now you've clarified that you are talking about minimum wage jobs specifically.

I've never said there will be no job losses, what I've said is that people will get jobs at places that have viable business plans.

But if a business is viable at that higher wage level, it would be viable at the lower wage cost level in the first place. So why don't these more viable businesses attract staff away from the less viable businesses right now, as it it? It's just a matter of offering slightly better wages to secure those workers, and then enjoy the profits of being a more viable business. There is no need to wait for the government to enact destructive policies before getting started.

The market will adjust to the circumstance.

The adjustment is that some workers would be made redundant in the name of them, without actually providing them with any security at all.

And yet, that's what the employees are paid for. 

Gladly we have established it that it is indeed employees that are paid.

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