(Bloomberg) — Prime Minister Fumio Kishida urged big Japanese businesses to boost worker pay this year, in a bid to get firms to sign up to his new form of capitalism and help the economy rebound from the pandemic.
“Wage hikes from firms are extremely important for economic growth,” Kishida said in a speech Wednesday to major business lobbies in Tokyo. “I ask that you take an aggressive stance on offering higher pay to help the Japanese economy.”
Kishida came to power last year pledging to boost middle-class incomes and create a new brand of capitalism that spreads prosperity more widely. To win general elections this summer, he may need to show some success in cajoling businesses to raise pay during wage negotiations in the next few months, along with containing a winter wave of the omicron variant.
Japan’s Kishida Vows Tight Borders, Faster Boosters for Elderly
In November, Kishida called on firms that have recovered from the pandemic to boost pay by 3% this year, echoing requests by former Prime Minister Shinzo Abe, who got only limited results for his efforts to convince companies to raise wages during the 2010s.
In Wednesday’s speech, however, Kishida refrained from naming a specific number for pay hikes, an omission that suggests an awareness that a concrete target may be difficult to hit.
“We have to turn the tide,” Kishida said. “The rebound from the covid crisis and the challenge of a new era together creates a moment that must be seized firmly by both the public and private sectors.”
More stories like this are available on bloomberg.com
©2022 Bloomberg L.P.
