Companies Encouraged To Increase Salaries:

 Article Source: https://mainichi.jp/english/articles/20230110/p2g/00m/0bu/051000c

Article:

TOKYO (Kyodo) -- Japan's most influential business lobby plans to ask member companies to demonstrate their "social responsibility" by granting pay rises that outpace inflation during upcoming wage negotiations, its final policy draft showed Tuesday.

The guidelines by the Japan Business Federation, known as Keidanren, for corporate managers discussing pay deals with labor unions in annual "shunto" wage negotiations come as Prime Minister Fumio Kishida has urged businesses to give above-inflation wage rises as part of his "new capitalism" growth and redistribution policy.

But it remains to be seen just how far companies will heed Keidanren's request, which is set to be adopted and published on Jan. 17.

Ideas:

As inflation continues on in Japan and as wage earners haven't had a real significan wage increase for a very long time, it only seems logical that Japan's Business Federation was say its a "social responsibility' for companies to contribute for the good of society.

Prime Minister Kishida keeps talking about "new capitalism" but just what is is really. Is nothing more than giving increased wages. Is it giving workers more benefits for the good of society.

Last December Kishida wanted companies to increase wages by at least 3 percent. So just what how much will companies in April increase wages remains to be seen.

Article:

At a Tuesday press conference following a meeting of top Keidanren officials over the guidelines' content, Chairman Masakazu Tokura called for "wage rises across the supply chain" and indicated he wants to see wages rise at a variety of businesses, regardless of their size.

The group's proposals are set to encourage companies to closely monitor price fluctuations while calling on them to maintain and improve the momentum of wage rises as part of their social responsibility.

The final draft also said surging prices present an opportunity for Japan to eliminate the deflationary mindset that has long afflicted the country's economy and emphasized the necessity of creating a "virtuous cycle between pay and prices."

Ideas:

Small businesses might have some challenges increasing wages while larger companies might be more inclined to give wage increases. 

For the good of society and companies to feel good about their "social responsibility", they might feel they have no choice, at this time, and actually increase wages above the inflation level.

The deflationary mindset has long been a sticking point in Japan, but delation has run its course in Japan and now it time to throw off that mindset and allow wages and prices to grow together for the good of the Japanese economy and society.

Article:

Increasing global demand for oil and other raw materials amid Russia's invasion of Ukraine has driven up their prices, and the Japanese yen's weakness against other major currencies has also lifted import costs.

As a result, a growing number of companies have been passing on higher costs to consumers, dealing them a blow at a time when wage growth has not kept pace with accelerating inflation.

Core consumer prices in Japan climbed 3.7 percent in November, a nearly 41-year high.

Ideas:

Yes, inflation is still a major challenge for the Japanese economy and society and the weak yen compared to other currencies is still a major challenge which is distorting imports prices.

If there was just inflation and not so much a Japanese currency challenge import prices might not seem as big a challenge as exists at this time.

Of course without wage increases inflation will continue to the a major challenge for consumers even at 3.7 percent, even though for some it might not a problem but for most families and consumers its a challenge.

Have a nice day and be safe!