Japan seeks wage hikes, over 1% GDP growth as population shrinks
Ideas:
The Japanese economy and society has many pressing concerns these days, but so do many countries globally too.
There doesn't seem to be any easy solutions to Japan's challenges, and if there were, they might have been solved or lessoned by now.
Being one of the fastest greying societies, doesn't help with consumer spending and of course the inflation situation makes it more challenging for senior citizens in Japan or some of them, as they might be on fixed incomes.
Labor shortages is another major challenge for the Japanese economy. But for good or not so good, Japan could have tried to solve this situation much sooner with improved immigration policies, but unfortunately, Japan has been slow to implement much that helps the labor situation.
An inflation-adjusted growth rate of over 1 percent is needed to show or indicate improved consumer spending in the Japanese economy, as consumer spending it they key for any large advanced economy, but its been lacking in recent years in Japan due to continued inflation.
And especially as the birth rate in Japan, like other countries, continues to decrease more and more consumer spending is needed to help the social security system maintain its current level.
And yes, Japan's government debt to GDP is the highest in the world among advanced countries, but its not an easy situation to solve. Its like households who try to keep a budget but there are always situations and or emergencies that come up that keeps households from sticking to their budget, and the same with governments.
All plans are good, but in the end, with politics, things always change. Yes, there are good and needed intentions, but in the final outcome, what was originally proposed, usually is not the final product.
So, yes, the Japanese government knows and understands it needs to reduce the government debt, but can it really do it or will different political factions water-down the original idea to where the government doesn't really reduce the current debt situation.
But its the same with all governments, who make or have good plans but they get watered down by different factions within the government.
Short on details seems to be true of many different governments as they try to make the ideas as flexible as possible, but they don't really give any real detailed ideas how they are going to solve the problem.
Yes, a 2 percent inflation target is good and needed, and even more wage growth over the 2 percent inflation target by all companies is needed to ensure there is adequate growth in the Japanese economy.
Wage growth in the Japanese economy is very much needed, as the debacle, first started by the Toyota group in the early 2000's has slowed wage growth for decades and now Japan is trying to play catch-up and even the 2023 wage increase and the 2024 wage increase might not be enough to help the economy recover from many years of no wage increases.
If the Japanese government can easily solve the problem, now it would be good, but it seems the situation is very complicated and its going to take some time before all of the significant variables are in place to get the Japanese economy growing again.
Wage increases are the key, or one of the most important variables, but all companies have to play their part in giving needed wage increases, and not just large name-brand companies, but small and midsize companies too.
The other variable is inflation, and the Japanese government and or the Bank of Japan, has to find a way to decrease the current inflation below the wage level increases, so that Japanese households can feel good about their wage increases and again begin to spend in the Japanese economy.
When that happens, then natural inflation related to consumer demand and consumer spending will replace the cost-push inflation, which is related to companies/importers passing on their costs to the next in the supply chain.
Yes, a temporary fix, but a needed fix, as Japanese households have been hit with inflation ever since the pandemic period.
It might be good, if possible, but of course it might increase the debt, but two or three more 40,000 yen payouts would really boost the Japanese economy and might get people spending again.
Not to say anything not so good of the Japanese government, but its taken a long time for any action related to inflation and or subsidies, beyond the energy subsidies in the Japanese economy.
A minimum wage increase is very much needed in Japan, as it might be a boost to get more young Japanese students back to the workforce, as they seem have left many of the service type jobs/companies that rely heavily on minimum wages.
Japanese need the ability to move from one job to the other, as there seems to a difficulty in changing jobs in Japan. At the present time, Japan's workforce seems to be to rigid and or not very flexible to allow workers to easily change jobs.
For example, why should a Japanese worker need or have to use an agency to tell their current company they are leaving, as maybe they are afraid and or afraid of what the current company will say or do.
Automation and digitalization is good as long as it doesn't displace some current workers, who probably at this time worried about their jobs being replaced.
Japan. long ago, lost the war with semiconductor chips to South Korea and Taiwan, and even China, but only recently has it began to get back into the game, and it might take a few years before any significant change take place.
All of the above ideas are good and needed, but again, governments come up with great plans but sometimes, due to economic pressures, or governments needs in other areas, they sometimes are forgotten or take a long time to get started. Lets hope the Japanese government can stay focused and do what they need for the Japanese economy to grow again.
And yes, Japan needs to expand globally and just focus on China and the US, but all areas of the world, that might be new niche markets as more and more countries, middle class, keeps growing.
Again, it seems Japan has fallen behind related to chips and artificial intelligence, and even if they haven't the image of Japan falling behind seems real.
Yes, Japan is a resource-poor country, Japan needs some energy FTA's with energy producing countries so that that when the energy markets begin to increase prices Japan doesn't need to worry too much about the supply and demand related to global energy prices.
Nuclear power might still be a negative in Japan after the Fukushima situation, but despite that its still a cheap source of energy that Japan needs to find a way to use safely and correctly.
The Japanese government should keep the energy subsidies for a long time or at least until wage increases begin to take affect and Japanese consumers feel good about spending again.
Have a nice day and be safe!
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.