Jesper, you make some good points but I can't agree with your premise that a failure to address meaningful labour market reform is a good thing. I would argue that lack of labour mobility is a key reason Japanese companies have been so slow to start raising wages notwithstanding much improved profitability and a tight labour market. Why pay more when there is little risk of people changing jobs (for full-time employees)? The rigid labour market continues to be an impediment to more efficient use of both labour and associated operating assets. The gains we have seen in Japan have been in spite of rather than because of the failure to reform and hinders Japan's long-term prosperity. Japan's creditor status has grown but Japanese relative incomes have continued to slide. Cheers, Dean
Interesting perspective, as always. That said, regarding 2) Fast Retailing (Uniqlo) is hardly representative of Japan, Inc's position on increasing base pay this year. While it's good to have a company like this that leads from the front, most businesses are not planning any increase or, if they are, only a very small, incremental increase at a rate lower than inflation. Also, about 3), there seems to be an ever widening gap between wealth distribution in urban and rural areas, despite the ongoing reliance on pork barrel projects in the countryside. Any reaction?
Jesper, you make some good points but I can't agree with your premise that a failure to address meaningful labour market reform is a good thing. I would argue that lack of labour mobility is a key reason Japanese companies have been so slow to start raising wages notwithstanding much improved profitability and a tight labour market. Why pay more when there is little risk of people changing jobs (for full-time employees)? The rigid labour market continues to be an impediment to more efficient use of both labour and associated operating assets. The gains we have seen in Japan have been in spite of rather than because of the failure to reform and hinders Japan's long-term prosperity. Japan's creditor status has grown but Japanese relative incomes have continued to slide. Cheers, Dean
Interesting perspective, as always. That said, regarding 2) Fast Retailing (Uniqlo) is hardly representative of Japan, Inc's position on increasing base pay this year. While it's good to have a company like this that leads from the front, most businesses are not planning any increase or, if they are, only a very small, incremental increase at a rate lower than inflation. Also, about 3), there seems to be an ever widening gap between wealth distribution in urban and rural areas, despite the ongoing reliance on pork barrel projects in the countryside. Any reaction?