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Kishida asks firms to match pay hikes to inflation

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So this is government, new capitalism?

https://japantoday.com/category/politics/focus-japan's-revamped-cabinet-still-needs-to-flesh-out-new-capitalism-push

0 ( +3 / -3 )

Asking is a good first step. Then add that if the corporations don't comply, they can expect higher taxes from next year on their dividends and retained earnings. If they still refuse, then threaten cuts in their procurement contracts.

15 ( +17 / -2 )

Yeah, that’ll happen.

Minimum wage is less than ¥900 in my prefecture.

And if a company is paying minimum wage, it means they would pay you even less….if they could legally get away with it.

-3 ( +13 / -16 )

Wage increases happen in April. So what do people do until then, just struggle?

7 ( +12 / -5 )

By the time any wage increases, IF they happen at all, get "negotiated" or implemented, odds are the inflation rate will have stabilized or dropped. They the companies wont do anything.

Wages have been stagnant, actually in terms of real money, have FALLEN dramatically over the past generation. I am literally surprised that there hasn't been more of a "brain drain" here in Japan, but then for that to happen, the people would need to expand their horizons, and become independent, neither of which is a strong point for the average Japanese person. So the status quo stays in place!

-3 ( +12 / -15 )

Kishida asks firms to match pay hikes to inflation

I wonder why the word "urge" wasn't used this time, as it was nearly every time Abe tried something? I guess it isnt as important, as asking for something, or URGING something hold a different meaning, when it comes to Kishida.

Easy to say no to an "ask", harder to not cooperate with an "urge".

Things really do get lost in translation!

-7 ( +8 / -15 )

Quite irresponsible. Before asking corporations and small businesses for pay hikes, the government should give the economy a kickstart by pumping money into it.

-8 ( +3 / -11 )

Smoothing the way for wage growth, the government will expand subsidies for small and midsize firms on condition that they raise pay, according to a government plan.

Companies see record profits=No wage hikes.

Companies suffer losses=No wage hikes.

Companies getting subsidies from the taxes of workers=Wage hikes?

New Capitalism sounds like socialism for the rich.

And this is from a socialist.

3 ( +9 / -6 )

It is a vicious spiraling circle. If you try to increase one, others will increase. Banking interests, unrestrained currency printing, petro dollar, and speculative investments are factors.

-6 ( +0 / -6 )

Before asking corporations and small businesses for pay hikes, the government should give the economy a kickstart by pumping money into it.

Right, yeah. Because the incessant handouts over the past few years worked really well didn't they...

We were always going to end up here, that's why some of us were vocal about it back in 2020 onwards...

9 ( +10 / -1 )

Shades of Abe?

Abe was urging and now Kishida is asking?

Pathetic!

But the joke is on the Japanese people who are getting poorer by the day.

Feckless Japanese politicians….

-4 ( +13 / -17 )

Asking ....Just enact a law to enforce it and be done with this pathetic 'urge' 'ask' nonsense!!!

8 ( +12 / -4 )

Oh yeah, companies will be falling over themselves to give those payrises because Kishida "asked".

This is leadership LDP style.

3 ( +12 / -9 )

It's all a big show. If Kishida asks companies to give more money to its citizens, he is seen as such a nice, thoughtful, caring Prime Minister. Showtime!

-2 ( +6 / -8 )

Wage increases happen in April. So what do people do until then, just struggle?

In other countries where inflation is a huge, huge, issue, they index pay every 2 weeks based on inflation numbers. This typically only happens when inflation is very high and most people not living paycheck to paycheck keep very little money in the local currency, preferring either USD or tangible assets. They convert to local currency on an 'as-needed' basis a few times a week.

It is the people on the lowest end of the economic scale who need the help the fastest. In the US, there's the poverty line, which is about $14K/yr to about ~$28K/yr per person at the lowest end. I'm over simplifying, since there is govt assistance for housing and food and medical when a household is around or below the poverty line. Because of govt formulas, it is possible to be better off not working at all than working and getting some govt assistance. Hopefully, Japan does better.

0 ( +1 / -1 )

Asking sounds nice but is totally meaningless. It's been tried before. If the J-govt were serious they would support stronger unions who demand pay increases.

4 ( +6 / -2 )

@theFu

Inflation is huge in Japan

There are children in Japan going hungry everyday.

Fact!

-7 ( +7 / -14 )

Thee will be no wage growth unless it is forced. And that doesn’t mean the fat cats in senior positions! Hopeless.

5 ( +7 / -2 )

Gawd this is just awful.

Couldn’t bear to read the whole article…

-1 ( +6 / -7 )

In other countries where inflation is a huge, huge, issue, they index pay every 2 weeks based on inflation numbers. This typically only happens when inflation is very high and most people not living paycheck to paycheck keep very little money in the local currency, preferring either USD or tangible assets. They convert to local currency on an 'as-needed' basis a few times a week.

What you are asking is for a system wide, including government agencies, to suddenly do something different.

The world will stop spinning before the entire country of Japan adapts to what is going on!

-4 ( +4 / -8 )

if a company is paying minimum wage, it means they would pay you even less….if they could legally get away with it.

If that were a wage you were willing to work for, yes.

But if they don’t want to hire to at the meeting minimum wage, you wouldn’t even have the chance for that job - it would be illegal. Ridiculous.

-2 ( +0 / -2 )

Japan is known for its persistently slow wage growth, low labor productivity and low job mobility. Russia's war in Ukraine has sharply increased energy, raw material and grain prices, accelerating inflation. This has highlighted the need for more robust wage growth amid the rising cost of living.

These Kyodo articles are rich with improbable chains of assertions and causation.

The BOJ and LDP policies actively promoted inflation and a weak yen and suppressed wages long before the Ukraine conflict.

They are actively promoting logical illiteracy.

5 ( +7 / -2 )

how abt he will work for free?

and set a good example of humble man?

sure he will never do as he will be tax burden till his last day in office.

1 ( +3 / -2 )

Of course everyone wants wage rises , or more generally, have his incomes increased, as not everyone is employed. In this dramatic current situation with inflation, low currency value and extremely high prices for resources and energy it is fully understandable and also surely kind of necessary to do something into that direction. But look, that’s absolutely not how it works either in capitalism or in his so-called new capitalism. First something has to be invented, produced and then successfully offered and sold in numbers on the local or global markets, before all those companies can begin to think about raising wages.

Japan is known for its persistently slow wage growth, low labor productivity and low job mobility.

And then this one here. If it is really true, then it’s of course another part of the discussion. However needed, wishful and welcomed those wage rises are, with a lower productivity and mobility in comparison to other countries or companies, they are of course also becoming less possible and probable.

So, in short words, sorry, but it’s just impossible and bare of logic to distribute any wealth that hasn’t been generated beforehand.

1 ( +1 / -0 )

Meet the "new capitalism", same as the "old capitalism": subsidizing private corporations (the Keidanren) with public money as well as ditch the tax-payers, as well as small and medium businesses.

Abe did that on steroids for nearly a full decade, the plebs are starting to notice, so Kishida (and any of his successors) is/are on a veeeeery tight leash.

-2 ( +2 / -4 )

Abe did that on steroids for nearly a full decade, the plebs are starting to notice, so Kishida (and any of his successors) is/are on a veeeeery tight leash."

Only in theory unfortunately .....in practice LDP will be re-elected next time around as usual. You know, cause they,re the only ones that can keep Japan........... "safe"

Hopeless.

-2 ( +5 / -7 )

kurisupisuToday  08:36 am JST

@theFu

Inflation is huge in Japan

There are children in Japan going hungry everyday.

Fact!

Inflation in Japan is considerably lower than in the other countries.

UK 9.9%, EU 10%, Russia 14.7%, US 8.3%, Brazil 8.73%, Australia 6.1%, India 7%, South Korea 5.6%....Japan 3%.

There are children going hungry in every country.

1 ( +4 / -3 )

Hasn't the j-gov been asking for this since forever? And what results have they gotten - zilch!

3 ( +4 / -1 )

If the government is asking for this, does this mean that government employees will get a raise?

0 ( +0 / -0 )

Dont expand subsidies, cut them if companies are not compliant.

Expanding subsides means either printing more money or tax hikes for regular folks, so nothing changes.

1 ( +1 / -0 )

Well, thank you, Mr kishida, I guess that means that we'll all get an extra 2%, no matter what, based on the alleged inflation target.

1 ( +1 / -0 )

Inflation in Japan is considerably lower than in the other countries. -UK 9.9%, EU 10%, Russia 14.7%, US 8.3%, B razil 8.73%, Australia 6.1%, India 7%, South Korea 5.6%....Japan 3%."

If you really believe the official J-govt figures of 3% inflation you either don't live in Japan or don't go shopping much. We all know the govt record of publishing economic figures over the years here....our eyes tell a different story.

There are children going hungry in every country."

True , but this article is about Japan.

2 ( +3 / -1 )

OssanAmerica

Inflation in Japan is considerably lower than in the other countries.

UK 9.9%, EU 10%, Russia 14.7%, US 8.3%, Brazil 8.73%, Australia 6.1%, India 7%, South Korea 5.6%....Japan 3%.

Oh dear...

You are definitely NOT living in Japan, are you? Also, your memory seem to be as short as your capacity at maths is limited.

Less than 20 years ago was the VAT 3 pct.

Since the 5 to 8pct VAT increase did shrinkflation become a thing in Japan and you pay the same for less quantity.

Since then we increased again VAT from 8 to 10pct...

Japan imports a lot of what ends up in households are their regular expenses.

Since COVID did freight rates go through the roof with the increase in cost unsurprisingly being passed over to the final consumers (i.e. us here in Japan).

https://www.statista.com/statistics/1250636/global-container-freight-index/

That is why in summer this year were prices hiked up on around 20,000 household articles.

Overall result: we are now, not only buying smaller portions but also paying more for it to make up for all adjacent costs (e.g. import) in addition to having had to stomach over time a whopping 7pct increase in VAT all this while salaries remain stuck to 1990s level when the bubble burst...

Dude, really??

-1 ( +5 / -6 )

I ask Kishida to ask companies for higher wages.

You see it is easy to make statement.

It is to be fesponsible and in charge to make actions.

As long as Japanese people vote for LDP, there will be no change ever.

1 ( +3 / -2 )

Flashbacks to Abenomics anyone? Abe did the same thing when he cut corporate taxes. The only difference is Abe ‘urged’ companies to increase salaries. Kishida has ‘asked’ companies to increase salaries. One would think a country leader would have the balls to make a salary increase mandatory.

-2 ( +2 / -4 )

…Kishida on Tuesday asked companies to aim for pay hikes that keep pace with accelerating inflation in wage negotiations

Wasn’t it the lack of financial maturity by The Government the cause of the latter that continues to result in the former? Circular logic/reasoning is a weak point of mine.

1 ( +1 / -0 )

"Asking" doesn't get us anywhere. Companies won't listen. We all know how corporates just want economic slaves they can pay the least. It's same as toxic relationships. They give you bare minimum but you have to make the most effort.

0 ( +2 / -2 )

@OssanAmerica

I take it that you aren’t in Japan to see the current circumstances here.

-4 ( +0 / -4 )

...it’s just impossible and bare of logic to distribute any wealth that hasn’t been generated beforehand.

But the wealth has and is being generated, but has never been redistributed fairly (capitalism's selling point) and, politeness and politics don't mix; "asking" always gets the same result so nothing "new" will come of Kishida's pleading to capitalist "fat cats" as opposed to making them an offer they can't refuse. Students of consumer capitalism 101 know that increasing purchase-power can revive the sclerotic heart of the system.

0 ( +1 / -1 )

Easier said than done, only if the companies hire less workers and increase their clients demand will have margin to keep their profit level and still raise the workers salaries.

0 ( +0 / -0 )

How about tax adjustments, since whatever salary increases everyone will get that will end mostly end up in taxes, current tax structure is simply broken given inflation and yen devaluation

1 ( +1 / -0 )

I am literally surprised that there hasn't been more of a "brain drain" here in Japan, but then for that to happen, the people would need to expand their horizons, and become independent, neither of which is a strong point for the average Japanese person. So the status quo stays in place!

Because there are not many "brains" to drain. The Japanese population is largely ignorant and xenophobic to obtain new language skills and new professional education. They don't have anything to offer and compete if they immigrate abroad. Only rich folks are equipped to move abroad but the rest of the population does not.

The only best types of people in Japan are ethnic Koreans and ethnic Chinese who have pretty much lived outside of Japan for many years already. They are probably the smartest, most talented, and richest part of the population but Japan continually discriminates against them.

Companies see record profits=No wage hikes.

Companies suffer losses=No wage hikes.

Companies getting subsidies from the taxes of workers=Wage hikes?

Japanese companies are notorious for manipulation and fraud. Hino Motors is recently caught in a quality fraud. Not sure if their financial status is legit.

I assume if their finances are right. Their financial statements display that they have profitability (in Yen) but if you translate the profit into USD, then it has been steadily declining for decades. With the weak Yen, profit keeps getting worse as you have worse purchasing power than ever.

New Capitalism sounds like socialism for the rich.

And this is from a socialist.

Neo-feudalism. Japanese elites have been always the same, xenophobic families of feudal lords since medieval times.

-3 ( +2 / -5 )

Centuries of squeezing the surplus out of the peasants is a hard habit to kick. Kishida is just the latest CEO of the executive of the modern state, an LDP committee for managing the business of Japan Inc.

-3 ( +2 / -5 )

He's pissing in the Wind here... sorry for the analogy, but it's pretty accurate in my opinion.

1 ( +1 / -0 )

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