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Japan Launches "Yakuza-Like" TacticsTo Name (And Shame) Firms Not Raising Wages

Tyler Durden's picture




 

With the Japanese stock market fading fast and macro-economic data showing anything but the kinds of inspiring recovery that Abenomics promised, the leaders in Japan have turned to a new inflation-inspiring meme - that the economy will be fixed when companies start raising their wages. Day after day the mantra is repeated in the hopes that repetition will make it come true and every company that raises wages (by an average of 4 Big Macs per month) is heralded as heroic.

But, as The Japan Times reports, the government (in all its newly socialist bravado) has threatened to take the unprecedented step of shaming big "uncooperative" companies that do not raise wages during the annual spring labor talks. Forget minimum wage adjustments, this is pay-by-mandate Maduro-style; we just wonder how Abe will cope when a nation used to 'full' employment sees joblessness surge.

 

So far Abe's demand are not being met...

Case in point, last night the Japan labor ministry reported that monthly wages excluding overtime and bonus payments fell 0.2 percent in December from a year earlier to 241,525 yen on average per worker, a series of declines which has now stretched to 19 consecutive months.

 

 

The broken record "common knowledge" meme Japan is trying to force feed (just a few headlines from Japan in the last week):

  • *ABE: WILL WORK SO SMALL, MEDIUM COMPANIES ALSO RAISE WAGES
  • *AICHI: HOPE FOR WAGES RISES IN NON-REGULAR LABOR
  • *AICHI: RISING WAGES IN JAPAN GOOD SIGN OF VIRTUOUS CYCLE
  • *JR CENTRAL TO RAISE WAGES BY 1,500 YEN, YOMIURI SAYS ($12!!! per month)
  • *AMARI: FEEL WAGES ARE RISING UNLIKE THEY HAVE IN RECENT YEARS
  • *LAWSON TO RASE WAGES FOR 1ST TIME SINCE 2002, NIKKEI SAYS

 

And so, as The Japan Times reports, forget currency devaluation (that didn't create the energetic J-Curve everyone expected) and the fall in the stock market is removing that confidence-inspiring pillar - so now Abe and his apparently socialist cronies are mandating wage rises...

The government threatened Thursday to take the unprecedented step of shaming big companies that do not raise wages during the annual spring labor talks, despite calls by the nation’s inflation-stoking prime minister to boost pay.

 

The surprising threat to disclose companies’ names comes days after Akira Amari, state minister in charge of economic and fiscal policy, raised the stakes in the sensitive pay negotiations with an apparent threat to take action against “uncooperative” firms.

 

...

 

The government “will react in some way” against firms that are “uncooperative with our policy of creating a virtuous economic cycle,” Amari told reporters on Tuesday, referring to the “Abenomics” strategy of Prime Minister Shinzo Abe.

 

Tabloid Nikkan Gendai compared Amari’s comments to the aggressive tactics used by the notorious yakuza.

The question, of course, is if you force firms to raise wages (when their raw material costs are already surging thanks to a devlauing JPY) just what do you think will happen to the workforce? For Japan, that is used to jobs-for-life and full-employment, a sudden rise in unemployment levels (though the employed would be paid more) would be catastrophic from a social strat perspective.

 

 

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Sat, 03/15/2014 - 13:31 | 4552162 Stroke
Stroke's picture

Give 'em an extra bag of rice.....It won't kill 'em.

Sat, 03/15/2014 - 13:48 | 4552218 Oh regional Indian
Oh regional Indian's picture

I think Japan went full retard in 1989. Exactly 44 years after the take-over.

Most un-normal society...Shinjuku....horry smoke......

ori

http://aadivaahan.wordpress.com/2010/09/03/the-curse-of-free-energy/

Sat, 03/15/2014 - 15:39 | 4552513 Harbanger
Harbanger's picture

After WWII , they became a part of the keynesian global financial system.

Sat, 03/15/2014 - 16:44 | 4552675 James_Cole
James_Cole's picture

Many years (decades?) into the co-ordinated worldwide effort by bankers to steal as much purchasing power from the peons as is possible while simultaneously fattening profits based on zero productive work….it seems we’ve finally stumbled upon a real controversy worthy of debate - forcing the people who’ve benefitted from free money to pay their workforces inflation adjusted wages. The horror!

Thank the gawds for weekend Tyler - putting the issues squarely out of context and reminding us what it’s like to read CNN / American news.  

Sat, 03/15/2014 - 17:25 | 4552809 Harbanger
Harbanger's picture

There never was and never will be such thing as free money.  Many have benefited from the scam that was the Fed.  Inflation adjusted wages is a temporary lollipop and necessary to keep the game going.  The real crime is the theft of national wealth in pursuit of a utopian state by our local statists and their useful idiots at the expense of liberty and sovereignty.  Then end is a reset and the hell that will follow.

Sat, 03/15/2014 - 21:28 | 4553600 Buck Johnson
Buck Johnson's picture

I agree, also Japan still have that end of the world (sorry Japan) radioactive volcano happening 60 miles away from Tokyo.  It seems everything is coming into full view.

Sat, 03/15/2014 - 21:59 | 4553669 newbie vampire
newbie vampire's picture

Japanese people will have a lot to be thankful for,  the new Lord of Fukushima Shinzo Abe.  They voted for it

 

Sat, 03/15/2014 - 19:28 | 4553199 falak pema
falak pema's picture

Plaza 1987 agreement forced Japan to go home FIRE focussed as with a strong Yen imposed by Reagan their exports thrust went kaput and their surplus got sucked into RE bubble at home.

Reaganomics ensured "our money your problem" stayed on top whatever the competitor. 

 

Sat, 03/15/2014 - 23:59 | 4553926 Oh regional Indian
Oh regional Indian's picture

I thik the Marshall (Martial!!!) plan took care of the future ruin of all it's recepients nicely Falak.

ori

Sat, 03/15/2014 - 14:28 | 4552304 CPL
CPL's picture

$12!!! per month

Would just about cover a single cup of coffee in Tokyo, last time I was there a slice of melon was $20.

Sat, 03/15/2014 - 15:24 | 4552478 U4 eee aaa
U4 eee aaa's picture

It will if it is a Fukushima special!

Sat, 03/15/2014 - 13:31 | 4552163 SWRichmond
SWRichmond's picture

Can't have a wage-price spiral without ...a wage spiral.

Sat, 03/15/2014 - 15:18 | 4552459 PT
PT's picture

Winner Mr SWR.  +1000.

Can't maintain artificially high real estate and share prices if no-one can afford the "repayments".  Either wages go up, else default or else real estate and share prices have to go down.  RE and share prices can not go down because that would mean the rich and powerful will become poorer.  Not gonna happen.  Default won't happen because that would be admitting that all the pricing was a scam to start off with.  That leaves wages.  Any "loss of competitiveness" with foreigners can be fixed by fiddling the exchange rate.

Sat, 03/15/2014 - 15:53 | 4552547 Elliptico
Elliptico's picture

It's all relative. There are no absolutes.

Sat, 03/15/2014 - 13:32 | 4552165 Greenskeeper_Carl
Greenskeeper_Carl's picture

Central planning and force have failed to achieve any of our goals. Must have moar central planning and force.

Sat, 03/15/2014 - 13:32 | 4552166 Smegley Wanxalot
Smegley Wanxalot's picture

now I see where ObamAbe gets his bullshit.

Sat, 03/15/2014 - 13:32 | 4552168 williambanzai7
williambanzai7's picture

Sat, 03/15/2014 - 13:33 | 4552171 Soul Glow
Soul Glow's picture

The Yakuza owns lots of Bank of America shares.  Godfather III type shit.

Sat, 03/15/2014 - 13:33 | 4552173 Ignatius
Ignatius's picture

Can't get past the tatooed baby image.  You think maybe his life course and choices are set?

Sat, 03/15/2014 - 14:48 | 4552370 Amish Hacker
Amish Hacker's picture

Totally creeps me out. Still, you have to admire his sense of committment, and at such an early age. 

Sat, 03/15/2014 - 15:10 | 4552432 Ignatius
Ignatius's picture

Wanted to upvote you twice.  First, the clever comment and second, for coming up with "Amish Hacker".

Sat, 03/15/2014 - 16:44 | 4552680 Harbanger
Harbanger's picture

I upvoted you for recognizing the commitment of organized crime.  Have you seen a picture of their current leader Kenichi Shinoad, he looks like the classic mobster.

Sat, 03/15/2014 - 15:27 | 4552486 U4 eee aaa
U4 eee aaa's picture

Imagine the temper tantrums

Sat, 03/15/2014 - 13:36 | 4552178 magpie
magpie's picture

Japan...it's like the Philippines with snow.

Sat, 03/15/2014 - 22:03 | 4553680 newbie vampire
newbie vampire's picture

Its better.   They save energy for street lighting because the citizens glow in the dark.

Sat, 03/15/2014 - 13:36 | 4552182 El Vaquero
El Vaquero's picture

Because more fiat equals more physical goods and energy!  /s

 

*AMARI: FEEL WAGES ARE RISING UNLIKE THEY HAVE IN RECENT YEARS

You know what I feel when I get a giant smoked turkey drumstick from one of the local BBQ joints?  I feel that I should have a mace in the other hand whilest riding along on a warhorse bashing the skulls of men so that I may have my way with their women and take their belongings.  What you feel, Mr. Amari, has nothing to do with reality. Now where's my fucking drumstick?

Sat, 03/15/2014 - 14:09 | 4552262 post turtle saver
post turtle saver's picture

awesome post +1... great visual!

Sat, 03/15/2014 - 13:37 | 4552186 kellycriterion
kellycriterion's picture

Fortunately Norte Venezuela and Este Venezuela have much legacy financing. We still have time to organize betting pools on when they will catch up to the Motherland.

March Madness has already been taken. Ego and Fear Gone Wild?

Sat, 03/15/2014 - 14:12 | 4552267 Tortuga
Tortuga's picture

Is that the picture of a tattooed person they imposed Senator Ted Cruz on and put up all over LA?

Sat, 03/15/2014 - 14:16 | 4552273 Atomizer
Atomizer's picture

Self-inflicted Emerging Market deterioration is occurring. All the back scene players are coming forth fighting for the new global slice of pie. Greed predicates death and destruction. Once they begin to come out of hiding. The easier it’s to remove the daily chaos events.  NSA, can you hear me now? Most of this comes out of the Whitehouse. We know he still spends time upstairs, long hours. The theatrical act is going to close the curtain soon.  Good luck hiding his exposure.

 

/Sarc

Sat, 03/15/2014 - 14:24 | 4552274 ThirdCoastSurfer
ThirdCoastSurfer's picture

Why doesn't anyone make the counter argument that while an increase in wages reduces employment, this can only mean that the jobs lost were inefficient anyway?

I need some help coming up with an example where the loss of an employee won't eventually be detrimental to the business.

If you don't hire the person to clean the floor at the office, clients will see the unseemly state and eventually migrate to someone who's office shows more professionalism, if that kind of thing bothers them, otherwise, who cares?

The gist of my argument, in other words, is that any job lost from an increase in wages was already a loss at the expense of capital instead of labor and capital is the keyword in the model of capitalism we profess is the best model yet developed. 

The larger argument of a wage/price spiral and that if you raise the minimum wage to $10 anyone already making $10 is now minimum wage and will want $12 and then those making $12 will demand $14, etc., is another argument.

Sat, 03/15/2014 - 14:25 | 4552291 yogibear
yogibear's picture

Another reason to replace people with machines. Less payroll, more profits.

Sat, 03/15/2014 - 14:57 | 4552394 Amish Hacker
Amish Hacker's picture

The basic flaw in Abe's approach is that, while it may be true that an improving economy will result in higher wages, it doesn't follow that artificially imposing higher wages will make the economy improve.

If I make myself sneeze, will I then have the flu?

Note to Ms. Yellen: same thing holds true for forcing the S&P higher.

Sat, 03/15/2014 - 15:26 | 4552484 PT
PT's picture

Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.  Debt dilution.

There are also other forces at play, but I've commented about them before in other threads.  Today I want you to contemplate the effects of wage rises and debt dilution. 

Sun, 03/16/2014 - 02:42 | 4554107 DontGive
DontGive's picture

We need to raise wages. Then we need to print. Then raise wages again. Print some more. Raise wages again. Print print print.

 

When does the insanity end?

Sun, 03/16/2014 - 07:12 | 4554338 PT
PT's picture

When people stop borrowing more than they can afford to repay.
When banks stop lending to the above-mentioned people.

In short, never.

TPTB make more money with things exactly the way they are. 
By definition, everyone else is powerless to stop them.
When TPTB start fighting each other as they are about to lose power, then hope will start to return. 

Sun, 03/16/2014 - 07:15 | 4554342 PT
PT's picture

Live within your means.  Then you will understand why so many do not live within their means.

Sun, 03/16/2014 - 07:26 | 4554352 PT
PT's picture

In hindsight, I missed out on a lot of experience and opportunity by taking responsibility for my actions and living within my means.  The socialites were right.  They won.  Maths doesn't matter.  Someone else will sort it out.

Sat, 03/15/2014 - 14:19 | 4552278 yogibear
yogibear's picture

And Obama and his clan are following the same script.

Get those evil companies not raising wages, it's ruining our inflate out of debt plan.

Sat, 03/15/2014 - 14:43 | 4552352 Atomizer
Atomizer's picture

Increasing wages & debasing the USD means cost of goods skyrocket. Obama will meet his goal under GDP growth models underneath BIS budget expectations.

 

Obama’s wife will nag you to death if you don't join the next ACA Ponzi scheme ploy.

 

Sat, 03/15/2014 - 14:59 | 4552402 slightlyskeptical
slightlyskeptical's picture

Somewhere there is an equilibrium between full employment, living wages and prices. As long as the price increases actually go to pay labor and not pad additional profits it can all work out. Full employment at livable wages also solves the welfare, entitlement, and govt defecit black holes we find ourselves in.

Sat, 03/15/2014 - 15:30 | 4552491 headhunt
headhunt's picture

Yes - that would work if we were communists and ants

Sat, 03/15/2014 - 15:35 | 4552500 ebworthen
ebworthen's picture

Agree.

Greed in corporations isn't any better than in a person.

Sat, 03/15/2014 - 15:14 | 4552448 ebworthen
ebworthen's picture

I'm telling you, they have this all wrong, just as in the U.S.

The Central Bank just needs to start sending bonus checks to households.

If it is good for banks and car makers and insurers and corporations it is good for regular folks.

Sat, 03/15/2014 - 15:33 | 4552475 Yenbot
Yenbot's picture
ZH Launches "Yakuza-Like" Tactics To Name (And Shame) Japanese

There, fixed it for ya'...

I found an interesting post on anti-Japanese propaganda over on this opinionated Lady's blog: Japan Translation USA...

Sat, 03/15/2014 - 17:19 | 4552814 kellycriterion
kellycriterion's picture

If you found that post interesting Yenbot, I have a project for you. Make a list of the fallacies employed by Miss Chikako.

Sat, 03/15/2014 - 19:12 | 4553147 Yenbot
Yenbot's picture

Done. The only error I can find is that she said you've been a member for 6 weeks, not five.

Sat, 03/15/2014 - 18:39 | 4553040 kellycriterion
kellycriterion's picture

ThirdWorldSurfer, economical and efficient, though related aren't coextensive. Economical is the large frame of reference while efficient deals with more relative measurements.

The concept you're grasping for is elasticity which is computationally hard.

Sat, 03/15/2014 - 19:21 | 4553171 falak pema
falak pema's picture

hahaha, neo liberal abenomics does an about turn.

Just goes to show the Reaganomics legacy that spawned the meme : the new left; aka Clinton and Tony Blair, are our greatest achievement; --dixit Maggie's farewell speech--; now finds another outlet : We got that wrong, our true, true son of neo liberalism was TONY BENN. Now that he's dead we have NO COMPUNCTION in admitting it.

The future of this world lies in going Keynesian THE WHOLE HOG AND forgetting about greed is good for the Chinese.

WHY??? Cos ducky all it does is make Chindia and Russia rich at OUR expense! 

Yes, we admit it... Outsourcing was not such a good idea...hahaha haha ha...Dear Henry's trilateral now sings : bring the work home and pay them all higher wages!!! With Chinese credit of course...that doesn't change as socialism needs the other guy's money, ducky! 

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