politics

Kishida pins hopes on wage hikes to accelerate wealth redistribution

61 Comments
By Noriyuki Suzuki

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*"It's important to use all possible means to create a mood in which companies want to raise wages," Kishida said.."*

So, what about if they don't want to? What is he gonna do? Building a sand castle all it is.

19 ( +22 / -3 )

Wage rises? Japan will have a man on the moon before that happens, and neither will happen in our lifetime due to low productivity and a work culture that remains based on being indentured to a company.

17 ( +23 / -6 )

Unless he raises the minimum wage then nobody is in for a pay rise.

Kishida and his urgenomics

30 ( +33 / -3 )

Urges....What a pathetic government.

12 ( +21 / -9 )

I bet the public servants will get raises

22 ( +23 / -1 )

@James

"urgenomics" love it!!!! (⌒▽⌒)

25 ( +28 / -3 )

"It's important to use all possible means to create a mood in which companies want to raise wages,"

That's not true at all. Before the pandemic, the "mood" was clearly there. Corporate profits were at all-time highs, dividends were rising and the stock market rallying, yet Japan's corporations resolutely refused to substantially raise wages. (And labour unions meekly acquiesced.)

Wage suppression, fat dividends and share buybacks are the essential components of neo-liberal, market based economics. Get used to it.

12 ( +15 / -3 )

More urges and hopes. Hope is not a plan! If he was serious he would be mandating salary increases for the 60% of the workforce on low salaries and short term contracts. And then, he needs to cut the salaries and bonuses of the fat cats reaping in all the money. We’ve heard this same hope and urge rubbish for over a decade with no changes except for cutting corporate taxes. The corporations got richer at the expense of the workforce. It’s just a hollow vote grubbing statement for those naive enough to believe it.

14 ( +16 / -2 )

Happy New Year!

-11 ( +3 / -14 )

I will believe it when I see it!

9 ( +14 / -5 )

"It's important to use all possible means to create a mood in which companies want to raise wages,"

That's not true at all. Before the pandemic, the "mood" was clearly there. Corporate profits were at all-time highs, dividends were rising and the stock market rallying, yet Japan's corporations resolutely refused to substantially raise wages. (And labour unions meekly acquiesced.)

Wage suppression, fat dividends and share buybacks are the essential components of neo-liberal, market based economics. Get used to it.

Yes. And we all know there won't be meaningful wage increases in this system.

13 ( +14 / -1 )

Urgenomics. Ha!

We should make that word of the decade.

21 ( +23 / -2 )

So he’s waiting for the Magic Wage Unicorn to do it. Tighten your belts everyone. Until there is actual labor action (slowdowns, strikes etc), nothing will happen...but Japanese are happy to be serfs. 2022, another year of declining standards of living.

12 ( +16 / -4 )

Government mandated wage hikes inevitably create inflation, and only serve to temporarily placate the ignorant and uninformed.

-11 ( +3 / -14 )

Kishida hasn't a clue since it seems he's never attended (Japanese) Capitalism 101.

10 ( +12 / -2 )

He better increase consumer confidence as well, because the government's response to this crisis has shown the people that they can't trust the government to do anything right. People will save for their own emergency funds.

9 ( +10 / -1 )

Wealth distribution always starts from the bottom, never from the top.

INFLATION no matter of how high it is 1,2,4% is BAD and DESTRUCTIVE for economy.

Deregulate law so people can benefit from their creativity, create businesses, and stop giving tax deductions for corporations. They used to pay 40% back in 80-90 now they pay 15%.
14 ( +15 / -1 )

"Companies have to be confident about the outlook when they raise base pay. A sense of uncertainty is what keeps them from base pay hikes," Kodama said.

The poor companies companies, living with uncertainty in this society. It is not like they can be bailed out and restored by the public treasury if there is a bad turn of fortune. Unlike their workers.

Socialism for the rich, rugged free market capitalism for the rest.

15 ( +16 / -1 )

Ah… now that is a brilliant plan.

Hats off in front of the genius!

7 ( +10 / -3 )

Urging and mood changing, hoping and pleading-no,no,no!

Japanese politicians have the power to change so much for the benefit of so many but they do not.

Most of them are there to look after themselves and I have heard it from some of them myself-they have no ambition to change anything.

Lazy and feckless…

7 ( +10 / -3 )

As long as the government puts the interest of investors and management ahead of labor, workers are going to get as little as their overlords can get away with. That also means more workers doing 38.5 hours per week "part-time" on a temporary contract.

Kishida is either ignorant or disingenuous. Or maybe a bit of both.

17 ( +19 / -2 )

I urge you to return sales tax to its 1989 introduction level of 3% or do away with it all together. That is something you can do right now Kishida-san to put money into peoples pockets immediately. Why is this not on the table instead of urging businesses to take up the short fall in peoples salaries created with your sales tax increases. If you can increase them then you can decrease them. But it’s easier to place the spot light on companies rather than yourselves and make them look like the ones who are the bad guys. The sales tax increases were touted as a necessity to combat the cost of looking after a top heavy ageing population. Covid seems to have shut that argument up completely without there being so much as peep about that bomb. But we can suddenly afford “go to eat” and “go to travel” subsidies. If you are serious about stimulating the economy (which you are clearly not) then do the one thing you can do right now and kill sales tax!

Lets see if uncle Taro can dip his hand into his own pocket for the people…nah I thought not.

From Reuters:

Japan rakes in record sales tax revenue despite pandemic.

https://www.reuters.com/world/asia-pacific/japans-sales-tax-revenue-exceeds-y20-trln-1st-time-document-2021-07-01/

13 ( +14 / -1 )

Here is my 2 cents advise,

The reason why companies can't raise prices is because people are buying goods for half or 1/3 the price ONLINE and it's mostly imported JUNK. people are spending money and are buying but NOT from Japanese makers, and until that changes the Bank of Japan will continue to struggles to "" fire up inflation toward its elusive 2 percent target.""

2 ( +3 / -1 )

I actually think he'll succeed in getting major companies to raise pay, with the condition that it not be mandatory, and that it not be an across the board minimum wage hike. Won't be long before he's touting his success, and people the nation over will see a 20-yen raise in yearly salary. Mind you, benefits will have to be cut to make up for it, and the maximum 100 hours a month of overtime will be scrapped for a no-limit overtime work rule.

8 ( +15 / -7 )

That’s very improbable because it needs a job and then that it is a job with raised wages. The combined probability is so very low compared to the whole population so that you can throw this unrealistic attempt right into the garbage can.

1 ( +3 / -2 )

The three arrows of Kishida's economic recovery plan:

Urgenomics, Hopenomics and Mullingnomics.

9 ( +12 / -3 )

@SmithinJapan

I actually think he'll succeed in getting major companies to raise pay, with the condition that it not be mandatory, and that it not be an across the board minimum wage hike. 

"Toyota Workers Union to abolish wage increase request"

https://news.yahoo.co.jp/articles/d4f1503f0c33e1f6a7384387683da91951d12604

Keep dreaming

8 ( +9 / -1 )

My boots on the ground observation is that there is already a highly overpaid class of Showa managers and then a vast gap from the rest.

8 ( +9 / -1 )

The government is full of hollow words. Large corporations will never increase wages merely by the government asking them to. Corporations and the super wealthy, will never donate or increase their cost unless it is advantageous for them to do so.

Wealth distribution should always start from the bottom and not just the top. Minimum wages increases should be made so that those barely surviving can attain more stable lifestyles and cope with inflation. Also corporate tax rates should be increased. Tax rates on the wealthy should be increased, along with getting rid of tax loop holes, which the wealthy always take advantage of.

The pandemic has forced many business and corporation to streamline their operations. Yet the government, both national and prefectural lags far behind. They need to streamline their out-dated formalities, aim for maximum digital operations (for example look to Estonia), regulate inappropriate and foolish projects such as Abe-mask (a useless size mask that delivered late and basically embarrassing to wear). the government needs to streamline and make better use of the tax money.

6 ( +8 / -2 )

Why would any company "be in the mood to raise wages" which would impact on their bottom line.

Just legislate an equitable minimum wage increase

8 ( +9 / -1 )

I don’t think just raising the minimum wage will be enough because those are low paid jobs to begin with. The whole outsourcing of previously full-time jobs to hakken shain who are paid only a small percentage of what the same full-time worker would get needs to be rethought.

7 ( +7 / -0 )

are they going to raise it to the cost of living in the city people are in? No, right? Then what's the point?

5 ( +6 / -1 )

This 2% inflation target is here . Has been for years . Japan is the only country in the industrialized world that doesn’t include fuel and food prices in their GDP. Why ? The excuse for both is always “volatile prices.” Same problem with free trade agreements. If the Japanese people found out how much higher they’ve been paying for food compared to the rest of the world , they’d be angry. Farmers have been hosing them for decades . We can’t do without fuel and the gov controls those prices …. Need more tax revenue? Jack the price of gas. That’s the fastest method. Higher wages ? Businesses are sitting on record amounts of cash and have been forever . Eliminate all the corporate welfare here…. Give it to the people…. They’ll spend it . Record 32 trillion yen budget of which 1.4 trillion is for family’s with school aged children.

7 ( +7 / -0 )

“I’ll take Urgenomics for 100 Alex.”

7 ( +7 / -0 )

The era of "urge and wait and see mode" .

Dither waddle dance.

Accelerating wealth redistribution and step up spending and wage increases to rejuvenate the world's 3 strongest economy.

Make everyone work harder and longer and raise prices and taxes.

Verbal diarrhea vomit .

6 ( +7 / -1 )

Clown

6 ( +7 / -1 )

Meanwhile, Japan's labor productivity continues to be low, a longtime problem keeping wage increases to a minimum. In 2020, the country ranked 23rd among the 38 members of the Organization for Economic Cooperation and Development in terms of labor productivity, or output per worker hour, according to Japan Productivity Center data.

In a recent speech, BOJ Governor Haruhiko Kuroda said that inflation should come with wage growth and that companies seeing labor productivity improve tend to raise wages.

"Bazooka" Kuroda blaming the workers for not being productive while still aiming for an illusory (and lethal to the economy) 2% inflation for what, 10 years?? Ya got to love that guy's sense of humor...He should be more than happy not to be lining up in front of Hallo Work!

I also kind of wonder about how what exactly "productivity" stands for and what workers are "accounted for" when it comes to calculate said productivity as pretty much 40% of the work force is on gig contracts.

Some gig contracts are doing work "critical" enough that you wonder why they are not perms are the work they do it important and routine enough to be considered a "permanent" task as having a stable job and a fair salary helps to motivate people! Others do lower-end but indispensable work, again, being rewarded with a fair salary does help! And finally, (especially in offices as far as I could see) are there a lot of gig workers who do tasks that could be automatized / simplified or even dropped (e.g. via IA, re-organizing the process/procedures/work-flow, system implementations or even more proficient use of existing tools such as macros or, I kid you not(!), even use of basic Excel-formulas, etc). Apologies, but the last category is inefficient to say the least (not these workers' fault as they didn't create this whole mess of a system and they are more likely to be "stuck" in/with it than anything else(!) ) and, yes, may even hamper "productivity" (depending on what the term is supposed to stand for).

Long story short: a bunch of old useless geezers talking about other people's lack of productivity and the lack of productivity of a system that they helped to create and are up and roaring about protecting is a bit rich!

7 ( +9 / -2 )

Make businesses well then there will have salary increases.

0 ( +2 / -2 )

The elites are only too aware that the sound which keeps them up at night are the drums of discontent growing increasingly loud.

https://japandaily.jp/rice-riots-1693/

4 ( +4 / -0 )

"It's important to use all possible means to create a mood in which companies want to raise wages," Kishida said

It’s not a problem of mood, but the economic environment.

If your workers aren’t going to quit for a better paying job, what is the incentive to offer better pay? Just being in a good mood? Which economic course is that theory taught in? Wishful Thinking 201?

Japan, the world leader in neoliberal economic policy (if one believes the JT comments) hasn’t figured this out yet… while wages continue to rise in various other developed nations around the world. They must be having great success with non-market based policies while Japan is struggling to see anything turn for the better with its “neoliberal free market labour market”?

Happy New Year :)

6 ( +6 / -0 )

Well, looking at his face and fist ....

.... the "impersonation" of a fighter!

2 ( +4 / -2 )

Haha! Unlikely. Same salary for nearly two decades. Newer employees starting with lower wages than I started with. Health and Pension premiums rising, along with local taxes creeping up and the consumption tax being used to fill government coffers. Perhaps something more than setting targets is needed.

10 ( +11 / -1 )

He said whip it, whip it good. Workers have a lot more to give, a cup of noodles, luxurious, 14hr shifts. Workers can give much more before they get a ¥20 a month pay rise. Who told them life would be easy. People are greedy always wanting enough money to buy food, pay rent, I say head down and work.

4 ( +6 / -2 )

maybe have real unions not the fake corporate shill unions then you can actual raise wages (that's how it was done)

8 ( +9 / -1 )

@fxgai

I, for one will never have income originating in Japan again-I have withdrawn from the exploitation of the system…

1 ( +2 / -1 )

I don't need a stupid politician to tell me to 'do the right thing' I just do it. Every year my 4 employees get a substantial raise plus a nice bonus.

I don't understand why big companies need to wait for the PM to tell them to give their employees a decent wage, if they really cared for them that would come without saying.

0 ( +1 / -1 )

Is that for every resident or or just the politicos? The politicos don’t need the money.

1 ( +1 / -0 )

Should restructure the labor market and make it more competitive for workers. Kishida's way is simplistic and is a pretty ineffective form of government interference.

2 ( +2 / -0 )

Mr. Kishida and most who are posting on the subject are missing the source of the problem. It is oligopoly and monopolies. Break up the big conglomerates into multiple smaller independently owned firms. Do not allow firms to combine or to buy into complementary markets ( example, don't allow trucking companies to buy warehousing and freight forwarding firms). It is the market power gained when firms combine, reducing the number of competing firms, that allows them to drive up prices and enjoy what economists call "monopoly rents", which is a fancy way to say profits above what could be earned in a fully competitive market. Those monopoly rents represent a wealth transfer from consumers to producers and are a dead weight loss to the economy. In a fully competitive market there should be so many buyers and importantly so many sellers that no one participant in a market should have the power to affect the market price. When you achieve this, price and quantity reflect the intersection of the supply and demand curves, a point at which prices and importantly profits, are driven down to the bare minimum to keep firms in business while output and employment are maximized. This is where the benefits of a market economy are realized. Allowing monopolies and oligopolies to persist degrades economic vitality, drains consumers of their incomes through excessively high prices and moves money from consumers to the bank accounts of producers and wealthy executives where it sits instead of circulating in the economy generating further economic activity. The steady decline in the velocity of money combined with the increasing concentration of wealth are vivid documentable testament to the degree of monopoly and especially oligopoly in major consumer markets. Address this problem and several others solve themselves as a result.

0 ( +1 / -1 )

@Desert Tortoise

There are too many fat brown envelopes being passed around for Japanese monopolies and oligopolies to be broken up.

In fact, industries here (Japan) form cartels which do not allow for competition at all.

Of course, forming cartels to price manipulate is a criminal offense in most countries and antitrust laws abound in the US but in Japan?

0 ( +2 / -2 )

Great plan Kishida Winfrey…..

you get a raise, you get a raise, you get a raise!!!!!!!!!!

1 ( +1 / -0 )

Of course, forming cartels to price manipulate is a criminal offense in most countries and antitrust laws abound in the US but in Japan?

In the past 30 or so years the US has lacked the will to enforce the anti-trust laws that are on the books. Fat brown envelopes are not confined to Japan ( I guess Japan doesn't use the ceremonial red envelope for cash gifts ? ). The raw number of corporations operating in the US has declined by thousands since the 1980s due primarily to consolidation. Both Miller-Coors and Anheiser Busch own 50 something beer brands apiece. Most of those, cough cough, "microbrew" beers you see are not independently owned but belong to either Miller-Coors or Anheiser Busch. Microbrew my aching backside! That kind of market consolidation should never be allowed. The same tactic is how the tech giants became so dominant, buy up possible competitors with an innovative product before they can become big and put a dent in your market share. This is true of far too many major consumer markets. If only people were as passionate about the economic abuses in the beer and bread isles of the supermarket as they are about the internet!

0 ( +1 / -1 )

Wages won't grow because the Japanese economy and businesses are simply shrinking. Paying your unproductive employees more won't address the root problems.

0 ( +0 / -0 )

You could double the Japan minimum wage and it would still less then Australian minimum wage. Like no companies are going out of business in Australia from paying a decent minimum wage. The same would happen in Japan. Just pay your citizen a decent minimum wage and the economy will start improving straight away. Unlike trick down theory which produce a poorer class.

0 ( +0 / -0 )

@ DT

There might be a plethora of dominating breweries in the US but at least they can sell beer cheaper into the Japanese market than Japanese breweries can produce here.

0 ( +0 / -0 )

There might be a plethora of dominating breweries in the US but at least they can sell beer cheaper into the Japanese market than Japanese breweries can produce here.

Says who? Show us some prices by way of comparison. The last time I was abroad in the Asia Pacific region I was amazed to see the price of a single bottle of crappy American or a better Mexican beer selling for as much as a whole case of the same brew sold for in the US.

What really happens is that sellers examine each market and make a judgement on how much the locals might be willing to pay for a particular product, then decide if they can sell it at that price profitably.

Here is a twisted example from the early 1990s where Levis sold for three times the US price in Australia, a pair of New Balance running shoes sold for twice the US price, with prices adjusted for currency values, and an Australian produced Ford Capri sold for $3000 USD less in California than the same car sold for in Victoria State, where it was produced. Smaller markets are less competitive and that means prices are higher.

0 ( +0 / -0 )

Better to create a UBI for adult working people that all companies pay into, then everyone can benefit rather than the well connected. This creates an economic floor not a ceiling so wages are the bonus not the means of sustenance. This will allow working hours to drop to a more humane level and stop punishing people

0 ( +1 / -1 )

Japan already has UBI. It is in the constitution. Slightly less than 2% of the population receive UBI.

0 ( +0 / -0 )

No matter who is elected to be in the same position as Mr. Kashida they will never be able to satisfy the masses. You can cry for a wage increase and still the only difference it will make is you paying more taxes based on the increased income. As your wages increase so does the goods and services of every other house hold items, and other things you can think of. On paper yes, you received a pay increase but when you go out to dine or buy other necessities for life you pay more. The wives come home complaining they are bringing less fruits and vegetables back and had to spend more even though the salary increased. You lose not gain unless you are the ultra rich

0 ( +0 / -0 )

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