Ideas

If the plan is to drive some small companies out of business with low productivity and not trying to really help them improve seems to be against some market fundamentals.

Of course there is always the idea of some companies are going to fail and some companies will survive in a market economy is nothing new, but to actually use strategies to decrease the number of companies in an economy outright seems a little odd.

And of course some might say its only natural, and maybe can't be helped as there might be too many under-performing small companies in Japan that have just been hanging for a long time.

But lets not remember, these small companies are about people and might be small mom and pop businesses who have put their live savings into the company and now, or for a very long time, again, might just be hanging on as zombie companies.

Of course there is going to be a lot of resistance to increase the minimum wage as its going to affect all companies, those that are doing well and of course those that might be considered zombie companies.

Yes, increasing the minimum wage might not be needed as companies seem to be increasing wages organically and those who can't won't be able to attract workers and might not have enough workers to stay in business.

And if they do try to increase wages their profits margins are so thin that they can't afford increased wages and it puts even deeper into a hole.

The Japanese economy might need a complete re-structuring of its small and mid-size companies that can compete and grow in the new era of the 21st century.

Unfortunately, innovate or die is still a good phrase as even large Japanese companies that don't innovate in the 21st century are going to be left behind in the global economy and in the new Japanese economy.

There might ways to reduce the number of zombie companies without actually increasing the minimum wage such as reducing loans to under-performing companies, reducing government subsidies that might help some companies and or reducing any other government programs that help under-performing companies.

It must be remembered again, these are people and they have families and everyone is affected by the action, so its important, to try and help these under-performing companies to maybe start new companies and or help them get new or different jobs.

To try and get rid of 228,000 zombie companies in the Japanese economy all at once would put the economy in a very bad position as it would increase the unemployment rate a lot not to mention these people might have loans and they might not be able to spend in the economy which could have a huge affect on the Japanese economy.

I don't feel the Japanese government is that heartless to drive 228,000 companies out of business but at the same time it might not be a good thing to keep them as zombie companies too.

These under-performing companies might be significant drag on the Japanese economy like under-performing banks might be too.

There has got to be a humane way to help these companies and maybe looking at how the Nordic countries handle their zombie companies might be a good start as the Nordic countries, societies seem to have the right combination on how to do things for their societies and economies.

Yes, it's not all the fault of some small companies and their profits margins as their business clients, which might be large companies, and have more market power, refuse to accept small companies from passing-on their costs to their business clients, which causes all kinds of problems for small companies in Japan.

And yes, pushing too  aggressively is not the solution to the problem as the Japanese public, as the Japanese public might know many of the 228,000 zombie companies and they might have families members too running these companies and it would be a significant public relations challenge for the Japanese government.

Every Japanese cabinet planned to support smaller companies but the same result always happens, large companies get all the benefits and small and mid-size companies are left in their wake.

Prefectures should be allowed to increase wages if companies in that prefecture can continue to exist with the minimum wage increases.

Unfortunately, there are many small companies in every prefecture that might be at risk if the minimum wage is increased.

For the sake of part-time workers, they should get a raise but the problem is, and it might be global, that small companies have very thin profit margins and just can't add any more costs which could potentially drive them out of business.

Most likely some or many small companies would like to increase their wages to help their workers but they just can't do despite the Japanese government calling for an increase in the minimum wage.

It's not that managers are unfit for their positions is that they are in a catch 22 situation where if they increase the minimum wage their small companies profits margins are just too small and they might eventually have to exit the market.

There is no easy answer to this situation. While the mid 2030 proposal might be good for small companies, it might not be good for the economy overall and definitely not good for part-time workers who need a livable wage.

South Korea, back before the pandemic, had its own minimum wage situation and there were all kind of problems associated with it but they were able to move forward but again with a lot of challenges for small companies and for part-time workers too.

It's very unfortunate that part-time workers in some countries, some economies, get short-changed a lot but all they want is a livable wage, as many part-time workers are not just students but housewives looking to help their families, mothers who can't find a good job and need that part-time job to pay for her bills and take care of her children and many other examples.

Again, Japan needs to look at the Nordic counties and see how they handle their minimum wage situation and how they handle their part-time workers.

The minimum wage situation is a hot political situation that is not going to be easily solved but at the same time it involves real people with real lives who need to make some kind of livable minimum wage.

But at the same time we can't forget about the small companies who are in a bind and might want to increase their wages but because of increased costs they can't do it without compromising their profit margins and potentially exiting the market.

And then there is the problem for small companies and the labor shortage that exists in Japan. If small companies don't or can't increase wages they are at risk of losing workers and might potentially have to exit the market all together as they just don't have enough workers to run their company.

Have a nice day!