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Japan to raise minimum wage to revive economy
24
Nov '15
With Japan slipping into a recession, the Government plans to raise the minimum wage and introduce other steps to revitalise the economy, according to an agency report.

The agency claimed that the draft of stimulus measures appeared to break no new ground on reforms that analysts say are needed to end decades of stagnation.

Prime Minister Shinzo Abe's government will also offer some financial support to people living off their pensions to bolster consumer spending.

The Nikkei newspaper had reported that the government is planning to raise the minimum wage by 3 percent. But the draft didn't provide any specifics and analysts say the government will need to do more to foster durable growth.

Raising wages is an urgent task for the Government which wants to ramp up consumer spendingto boost domestic demand and pullthe economy out of 15 years of deflation.

The economy has fallen into recession twice since Abe took office in late 2012, and his government is under pressure to show that it can improve the economy with a package of steps due this week.

The national average of Japan's minimum wage was at 780 yen ($6.33) per hour in the last fiscal year, so a 3 per cent increase would still be virtually insignificant and it illustrates a daunting task policy makers face in boosting consumption and growth.

The minimum wage has been rising for the past few years, but Japan's rates are only slightly above the average for OECD members, and labour unions have argued for bigger increases.

According to the draft policy, the government will also loosen regulations to encourage capital expenditure by small firms, and provide a time frame for lowering the corporate tax rate below 30 per cent to improve competitiveness, the report said. (SH)

Fibre2Fashion News Desk – India


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