Japan Prime Minister Urges Wage Increase for the Country’s Workforce
Recent news have it that Japan’s Prime Minster, Shinzo Abe, is urging business leaders to increase wages in an aim to spur consumption and alleviate the impact of the upcoming sales tax hike as planned in October. In fact, for the six consecutive years, he has been requesting such an increase.
During the meeting of Japan Business Federation, the country’s biggest and most powerful business lobby, and also best known as Keidanren, Prime Minister Abe claimed:
“I would like to request a wage hike that will further cement the upward momentum of the economy,”
Abe further claimed that he would refrain from proposing an exact figure for wage hikers, but he quoted the average of at least 5 percent back in 1989, approximately double this year’s figure, as a target.
Prime Minister Abe’s request came up ahead of the annual wage negotiations between management and labor unions that usually take place in the spring, hoping to counter any fall in domestic demand predicted to arrive once the consumption tax increased to 10 percent in October from the current 8 percent, as previously planned.
Last year, Prime Mister Abe likewise urged business leaders to raise employees’ monthly salaries by at least 3 percent in the year 2018 in the hope of spurring private consumption and prevent chronic deflation. Apparently, such decision to request a specific figure coming from a country leader is considered rare.
However, many companies remained cautious about reducing their cash reserves to a wage hike.