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 [10], 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... [11]
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.
[12]
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 [13], 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.