Ishiba aims to keep wage hike momentum; small businesses worried

Prime Minister Shigeru Ishiba said Tuesday the government will work with business leaders and labor unions to create an environment where salaries keep rising, vowing to achieve his goal of raising Japan's average minimum hourly wage to 1,500 yen by the end of the 2020s.

With rising costs, that 1500 is going to be worth less than 1055 by the end of the 2020s.

Which shows Ishiba, the LDP and the business associations care not one whit for workers.

Plenty of talk. Plenty of hot air. Salaries increase when worker productivity increases. That should be the focus. Heck, that should have been the focus the past 30 years during this malaise.

Japan Labor Productivity Ranks 30th among OECD Nations; Observers Blame Failure to Invest in Human Resources

Japanese workers produced $52.3 dollars per hour in 2022, giving Japan its lowest ranking since comparable data became first available in 1970. Japan’s labor productivity improved 0.8% in 2022 from the previous year, but its ranking went down by two spots.

https://japannews.yomiuri.co.jp/business/economy/20231225-157873/

PM Ishiba is trying to keep the LDP relevant-an insurmountable task..

keep wage hike momentum; small businesses worried

Only forget one thing that many businesses in Japan is living on really tight margin. That's why many of them can't even pay intern when those Vietnamese intern did overtime.

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Japan Labor Productivity Ranks 30th among OECD Nations; Observers Blame Failure to Invest in Human Resources

Which is really obvious to Japan, where Japan want to have more worker and consumer but not interested to contribute to number of babies and population

Salaries increase when worker productivity increases.

That is a neo-lib myth. In the US, there has been a disconnect between real wages and productivity since the 1970s. Salaries increase when labor unions are strong and strident. Japan's unions, sadly, are wimps, which is why prime ministers need to step in to plead the corporates to give raises in line with their huge earnings growth of recent years.

Having done the necessary research, it is clear that Ishiba is going to save Japan. The salary increases he is creating will set off a chain reaction and make Japan wealthy again through the people's personal wealth. Expect a baby boom and sharp reduction in unskilled and undereducated foreign laborers disguised as students.

Please share the economic theory which states that wages go up when worker productivity goes down.

That is a neo-lib myth

That is a neo-lib myth. In the US, there has been a disconnect between real wages and productivity since the 1970s. Salaries increase when labor unions are strong and strident.

Preach on brother. The data is on your side.

https://www.epi.org/productivity-pay-gap/

But people from Japan to the USA keep falling for this trickle down foolishness.

Trump's proposed plans, such as raising tariffs and cutting taxes, could affect the U.S. economy and accelerate inflation, a Cabinet Office official said.

And believing tariffs will bring down inflation.

Why are they doing this? Can anyone explain what's really going on?

Ishiba aims to keep HIS wage hike momentum; japanese taxpayers worried

I truly dislike the productivity argument given for Japan’s low wages. In a global comparison, yes, Japan has not kept up with its peers. KEPT UP.

Its growth per capita has been rising steadily since before the year 2000 only its wages have flatlined. This according to ministry of health, labor and welfare statistics.

I don’t know about other people, but when my salary doesn’t rise while my productivity increases over a 20 year period with minor dips (2008 and 2020) that is a problem.

Wages need to go up as they have done in other nations.

Would be better to prevent inflation.

Cost of living is up. Salaries are rising. Tax brackets remain unchanged. Result: Net loss in actual income / buying power.

Inflation is driving more people to low, poor class.

Would be better to prevent inflation.

This is globally true. Before you could blame Covid, but now its the two wars that are pushing prices up.

Though lower than elsewhere, inflation is a bigger issue for Japan due to the large elderly population.

1,500 yen by the end of the 2020s

In other words, he promises that they will be getting even less than they are now when inflation is factored in. I find it interesting that hotel prices have double tripled and quadrupled in the past 3 years - but the pittance they pay their workers remains unchanged.

BertieWooster:

Why are they doing this? Can anyone explain what's really going on?

Ishiba probably wants business leaders to view wages not just as a cost, but as something that increases consumers' purchasing power, which ultimately contributes to business profits, thus helping to drive the economy in a virtuous cycle. So, he is advocating for wage hikes if possible.

They raised the minimum wage drastically in many areas of the US. This what happened, inflation/prices went up substantially, businesses laid off a lot of workers and/or cut their hours. I expect to see the same results in Japan, but I could be wrong.

commanteer

In other words, he promises that they will be getting even less than they are now when inflation is factored in. I find it interesting that hotel prices have double tripled and quadrupled in the past 3 years - but the pittance they pay their workers remains unchanged.

It is because the hotel businesses and pretty much all businesses costs went up a lot. Whenever business costs go up from external factors, they always pass the increases in costs to the consumers. I have seen inflation/prices/costs of living for virtually everything skyrocket in the US for the last 4 years because of that.

It is because the hotel businesses and pretty much all businesses costs went up a lot. Whenever business costs go up from external factors, they always pass the increases in costs to the consumers. I have seen inflation/prices/costs of living for virtually everything skyrocket in the US for the last 4 years because of that.

Maybe in the US, but in Japan, prices haven't tripled in 2 years for most things except for hotel rooms. Room rates have gone up well above any increase in costs. And staff (one of their biggest costs) are being paid almost the same.

Minimum wage by country, in US$:

Aus: 18

NZ: 16

UK: 15

Ger: 14

USA: 12 (ave. across States)

Can: 11

Kor: 10

Jp: 7

Factoring in Purchasing Power Parity, Japan ranks between those economic power houses Spain and Greece.

Then, consider how much tax the average arubaito worker has to pay.

Japan's decline over the past 35 years is simply extraordinary.

who can benefit under LDP politics are large corporations and wealth class only.

Inequality expands at Japanese society, Engel's coefficient is increasing, poverty people become to prey of fraud or criminal group one after another.

Real problem remains a massive outflow of capital from Japan as the market shrinks and ages.

How can any country be competitive or 'productive' without investment? Thus, wages are stuck, as business seeks to consolidate as the market shrinks.

Japan has by far LOWEST amount of FDI/foreign direct investment as % of GPD, nobody in their right mind can invest here, including Japanese Corps.

Some may argue corp. profits are 'great' but take that Yen 'profit' and try buying real assets. You'll find given rise in real asset prices (any broad-based $commodity index), Yen's purchasing power MANY times lower than 4 years ago, depending on exact F/X and $ pricing of commodities, approx. 4x today = Companies are POOR!!