Voices
in
Japan

quote of the day

First and foremost, politicians must abandon the unrealistic and optimistic premise of Abenomics that Japan can cure all ills just by reflating nominal growth.

15 Comments

Shigeto Nagai, an economist at Oxford Economics. He says that the Japanese government offering shot-term tax breaks likely will not convince firms to raise wages, calling instead for reforms in areas such as Japan's rigid labor system.

© Thomson Reuters

©2022 GPlusMedia Inc.

15 Comments
Login to comment

It seems Nagai-san is definitely not a fan of Abenomics.

https://blog.oxfordeconomics.com/content/author/shigeto-nagai

Less recent, but another take on the matter.

https://apjjf.org/2018/6/INOUE.html

One thing that I would like to know more about it the "...calling instead for reforms in areas such as Japan's rigid labor system."-bit. This one could be read both ways (i.e. trash workers or trash the current wage-slave system).

3 ( +4 / -1 )

Japan was stuck in deflation and recession when Abenomics started. Many things improved. The exception is personal income, but that is a problem created by private-sector employers, not the govt. The corporations are consciously choosing to hoard their growing cash piles rather than give raises in line with their profit growth.

Corporate tax breaks (!) won't work because shareholder capitalism rewards greed. They'll just hoard more. Tax hikes are the solution, using the extra revenue for enhanced benefits for low-income workers and creating a proper social safety net.

2 ( +6 / -4 )

Just look at the policies of parties in this coming election, no one present a long-term investment policies. 10K-yen one-time money, 3 months no-tax, 5% tax reduction for a limited time. All are just patches policies, none that creates hope the country can look forward to.

5 ( +6 / -1 )

Tax hikes are the solution, using the extra revenue for enhanced benefits for low-income workers and creating a proper social safety net.

Tax breaks in return for pay rises seems even better - less government bureaucracy and therefore less waste.

-1 ( +3 / -4 )

I am so glad the article went into depth on Japan’s rigid labor system. Quite informative.

0 ( +2 / -2 )

Before I make a comment on this, I have to get a stack of A4 paper and get ink for my Hanko and prime my fax machine using the landline. It might help if I don my toupee and put on adult diapers. Now I’m ready.

0 ( +4 / -4 )

The real problem is that guys like Abe are so much richer when stocks are blazing higher. They have a conflict of interest with their constituents.

4 ( +5 / -1 )

offering shot-term tax breaks 

Are the tax breaks Covid related?

1 ( +2 / -1 )

Abe three arrows:

 (i) aggressive monetary policy

did carry out resulting in J government owning 40% of the Nikkei winners, stock owners, losers everyone else. Japan still experiencing deflation.

(ii) fiscal consolidation

Bah hah hah, nothing done here at all. Zero. Total failure.

(iii) growth strategy

Bah hah hah, Japan still striking economically.

And Womanomics, another failure. Japan gender ratings worse now than ten years ago. 30% goal of women managers by 2020 huge failure. More women in poverty now than ten years ago.

So yes Abe failed and more Abenomics will result in more failure.

2 ( +3 / -1 )

He is right, a radical reform of the archaic Japanese labour market is required, with greater workers rights and statutory protection and support for those exercising them.

As long as politicians are so closely linked with industry and tied by financial apron strings there will always be a conflict of interest that they will inevitably resolve in favour of what best serves their own pockets.

Japan is a very unbalanced society with a very long standing focus on supporting business and thereby more covertly the wealthy elites who run business and the government. In any other democracy this could not continue for long but Japanese culture facilitates it.

2 ( +2 / -0 )

I’m going to pull my really expensive small Abe San mask over my eyes and cry.

1 ( +2 / -1 )

@JeffLee

It was not just personal income that did not improve under Abenomics, it was all aspects of wealth for 90% of the population.

Nagai's blog:

https://blog.oxfordeconomics.com/content/japan-why-abenomics-failed-to-reflate-household-wealth

According to the survey, from 2014 to 2019, average household wealth in Japan fell by 3.5%. Only the top 10% wealthiest households enjoyed an increase – their net wealth grew 8.2%.

Real estate, which dominates household wealth, rose by 3.5% on average. But only the wealthiest 20% enjoyed growth, highlighting the polarisation between prices for expensive properties and the rest as demographics and investment drove demand for luxury residencies in cities, especially apartments.

Financial assets declined for nearly all households, amid diminishing disposable income.

-2 ( +0 / -2 )

@happyhere

It was not just personal income that did not improve under Abenomics, it was all aspects of wealth for 90% of the population.

Well, salary/income determines household wealth for most households far more than any other factor.

Financial assets declined for nearly all households, amid diminishing disposable income.

Huh? Japan's household financial assets rose to record highs during the Abenomics years. Some households did better than others, that was because they invested more of their savings instead of traditionally holding cash or buying govt bonds and life insurance. The Abe administration did actively promote non-taxable retirement schemes like NISA, but if people choose not to join them, that's their problem, not the govt's. They're very accessible and user-friendly.

-1 ( +0 / -1 )

Shigeto Nagai should run for PM

-1 ( +0 / -1 )

@JeffLee

Please learn the difference between average household assets and median household assets and report back. I recommend Piketty.

If the top 20% double their assets and the bottom 80%'s wealth declines a bit because they don't have any assets to invest, the average still goes up. The 80%' s wealth goes down.

0 ( +0 / -0 )

Login to leave a comment

Facebook users

Use your Facebook account to login or register with JapanToday. By doing so, you will also receive an email inviting you to receive our news alerts.

Facebook Connect

Login with your JapanToday account

User registration

Articles, Offers & Useful Resources

A mix of what's trending on our other sites