WELCOME TO CRISISFORUMS.ORG!
(1) Please swing by our "HELP CENTER" to view our forum rules prior to commenting.
(2) Acknowledge that by commenting or posting, you take full responsibility for the content and message of the information you put forth, which do not necessarily reflect the opinions of this website.
(3) If you would like to post your own discussion threads, just contact one of the staff so we can verify you as a human.

"Abenomics" Being Held Back By Japanese Companies Refusing to Give Raises in Spite of Record Profits


With profits soaring, Japanese companies’ record-breaking cash pile rises ever higher. That’s bad news for the economy, which is relying on exports to sustain a modest recovery as consumers struggle with stagnant wages.

Japan’s biggest economic problem is too much income flowing to companies and their piles of unproductive cash are the main obstacle to revitalizing consumer demand, according to Diana Choyleva, chief economist at Enodo Economics. 

Few analysts expect robust pay increases when Japan’s biggest companies and unions sit down for spring wage negotiations. In fact, the Japanese Trade Union Confederation says it will ask for about a 2 percent increase in monthly base wages, the same amount it sought last year, when it received a 0.44 percent gain.

Weak wage rises and consumer spending are frustrating policy makers. Companies were expected to respond to record profits, partly the result of a weaker yen, with strong pay increases and capital investment. Yet higher pay is the missing link in the "virtuous cycle" sought by Abenomics, Prime Minister Shinzo Abe’s growth program.

And while wages stagnate, the disconnect between profits and investment has widened since the global financial crisis.

https://www.bloomberg.com/news/articles/2017-02-21/corporate-japan-stacks-up-cash-skimps-on-pay-raises




People in this world look at things mistakenly, and think that what they do not understand must be the void. This is not the true void. It is bewilderment.
- Miyamoto Musashi, The Book of Five Rings
Sign In or Register to comment.