Ministry to name firms refusing to raise wages

i don't understand why there is so much fuss over few hundred yen wage hike.

What is it called when there are centrally planned wage/price controls again? Oh, right, free market? Nah. Try totalitarianism.

Bet none of the foreign employees companies (eg english schools, wedding pastors, ALT companies, labour exploitation etc) ever increase pay.

So all a firm has to do to avoid being named is increase wages by even ¥1?

In some ways, I applaud this. The large companies and corporations lobby the government for a tax break, and various other incentives, with the reasoning that they would turn around and be able to hire more workers, etc, and inject that money into the economy.

Instead, corporations are sitting on fat stacks of cash and hoarding these cuts, all the while either cutting workers, hours, pay, etc. Many are making record profits while still claiming they need more tax breaks. The Japanese government is saying enough is enough, we've done our part and cut your taxes, now you do your part and give that money to the workers.

Of course there are loopholes. After all, a 2000 yen increase a month isn't much per worker. But when you're talking 10,000 workers, that's actually a lot of extra money monthy being injected into the economy as a whole.

If you are a regular employee at a firm on the first tier of the Nikkei, this will help a lot. If you are a contract worker, a part-timer, a foreigner, or work for a non-international (e.g. the vast majority of the workforce), this will be of little/no assistance.

I think its fantastic!!!!! Name and shame!

In related news, the ministry of education is trying to figure out why bullying exists in the schools. 'Name and shame' is what you do with criminals, not businesses. Finger-pointing and yelling nya-nya nya-nya is what most five-year-grow out of by the time they are 10 or 12. Not so, apparently, Amari.

I can see both sides on this. Certainly some companies, especially the export-driven ones have benefited from Abe's loose money policy which has driven down the yen. But for a strictly domestic-oriented firm, part of the "third arrow" was supposed to be a cut in the corporate tax rate, which is among the highest in the world. So that has not happened, but they are supposed to raise wages anyway to keep Abe happy. And domestic sales may very well plunge in April when the consumption tax goes up, right when these wage increases would hit.

In other news, Gyouza no Oushou has increased salaries by 10,000 yen. Way to set the pace!

or in other words: "Give the people more money for us to take!"

This is clearly not good for small to middle small size businesses. The big companies are under pressure to increase salary which means, since operations are only partially getting better with the weak yen, they will have to meet that loss somewhere else... by bullying their subcontractors even more.

I logged in to make a comment, but I don't need to because borscht already made it. This is just institutionalized bullying. How do they expect kids not to bully when the government is doing it? Disgraceful. It also shows the desperation of the Abe administration for abenomics to work no matter what means they have to take.

That said, companies that are hoarding money without passing some along to their workers are also disgraceful. But two wrongs don't make a right.

Bad policy all round. The government shouldn't be playing favorites on this. Moreover, how is this going to be judged? How are businesses going to be surveyed? The mechanics of trying to implement a policy that is of little substance (and stinks of pandering) will be very difficult. Open to abuse? It is not like the government has better things to do....

the gov't tried the carrot approach, and it failed miserably. now they are using the stick approach to coax more companies to boost wages. bullying it is not when you have benefited from the gov't largess but refuse to give any thing back.

Somehow this doesn't sound like capitalism. It also sounds like the government is trying to cover their tax increases. Wonder if 2700 yen will cover the 3% rise in sale tax? Outing the companies that don't comply doesn't sound like bullying as much as it sounds like blackmail or mafia/yakuza offers that can't be refused. Something like selling those new year decorations.

How is this legal? This isn't a communist country the government has no control over raising private companies wages.

This country is really going to the dogs! Most families would spend around ¥200,000 in taxed purchases per month. A 3% increase will be an extra ¥6,000 per month, and these corporations are offering a salary increase of less than half of it. Now, here is the government playing 'bully boy' to make companies increase the salaries to an amount that doesn't compensate for the sales tax increase. When these so-called 'economists' made the BS Abenomics plan, did they actually think about a full plan or just throw a whole bunch of fiddle sticks in the air. It hardly seems like a well thought through economic plan. It just seems like a bunch of ideas thrown together and they contradict each other.

This is a last ditch effort of a failing government with a failing economic policy. As soon as the tax hikes kick in, the economy is going to go in the tank.

Get ready for the crack up BOOM.

This country is really going to the dogs!

You can leave at any time.

these corporations are offering a salary increase of less than half of it

Do you know how much the labour unions were asking for? Do you? They know what is realistic and then add some cos they know they will be have to come back to the middle somewhere. Then multiply that figure by every employee every month, also factor it in to the bonuses and other benefits employees receive - it bumps all remuneration up.

Let me know what figure you come up with. And if you're not happy with it, you pay for it.

I love it - a public shaming for not towing the party line.

You can leave at any time.

Daijoboots -- been there, done that, and have the t-shirt to prove it. And am glad that I no longer have to deal with this kind of government "thinking". It was difficult enough keeping my business afloat when I was there without having to deal with nonsense like this. Shaming companies into towing the line -- could we be more childish? Na, na, na, na, na...I'm going to tell on you.

Fair enough. The companies can probably afford to raise workers' salaries by cutting back on the masssive outlays the spend to wine and dine METI bureaucrats. Mr. Amari and his underlings had better get used to taking their evening meals at Yoshinoya, where the gyudon goes for 300 yen, but no charge for the extra helping of benishoga.

Great! name and shame!

Japan’s trade ministry said Thursday it would take the unprecedented step of disclosing the names of firms that did not raise employees’ wages

This is a great idea. I wish the U.S. government would do this with those large companies who pay poverty wages to the bulk of their workforce.

Bullying out in the open, no doubt. Good example for everyone to follow, isn't it?

Almost 90% of total Japanese firms are medium sized and small companies and 10% are large companies such as Toyoda, NIssan, Sony,,,, etc. It seems that smaller companies can't afford to raise wages whatever after 8% tax.

I approve of the ministry shaming those companies refusing to keep up with wage increases.

You can leave at any time. says daijoboots. Is it possible to get a more boring, unconstructive comment? Many foreigners in Japan have families, houses, land and proper non-english teaching jobs. I think bullying companies into raising salaries and wages is just appalling. This is not supposed to be a centrally planned communist country.

Companies been lobbying for corporate tax reductions, they are getting those so yes they have to raise wages, the point is getting more people employed and payed and not increasing company profits. If you are operating at a margin where upping a bit of salary to equalise the market increase to 3% will put you out of business , maybe its time to close the company all together.

Met a guy last weekend who taught English in Japan in the early 1990s and was making just over US$2000 a month. Two decades and English teachers are still making the same wage. PT Barnum is laughing in his grave.

@umbrella. I agree with you comment, except the implication that it would be ok to tell us 'non-proper' English teaching jobs people to go home. The lack of proper hiring and use of English teachers in this country does not negate the demand of the public, nor the fact that we are paying taxes, pension, and insurance money, as well as rent, shopping, traveling in this country. Do you think the government would like us all to go home? I am not saying you meant this, but even us lowly teachers have value

Readers, please do not attempt to turn this thread into a discussion about English teachers.

The cries of communism in the comments are pretty far fetched. The government has not passed any laws forcing companies to do anything, all it is doing is releasing information to the public that for the most part is probably already in the public domain anyway.

The government has an obvious motive for what it is doing, but I fail to see what is nefarious about a government doing something to try to boost the wages of its citizens. The only real problem with it in that regard is how weak and ineffective a mechanism it is - most companies probably dont care if they are on the list or not since it wont really affect them.

of all the companies that will increase wages, how many will increase enough to cover the tax hike!? very few im afraid. unless wages increase at or a faster pace of inflation then nothing will change with consumption. the average Taro will just tighten spending even more which means less revenue for the Gov. taxing people to the cows come home wont make them spend, only more money in there pockets will.

It's a necessary step by Abe's administration. Taxes are going to hurt, and wage increases have been dismissed by companies. Unfortunately, using this solution means companies are going to recruit more contract workers rather than full time employees. The older generation will continue to secure itself at the cost of future generations.

Having had his arrows all fallen way short of target except getting the country's economy and political relationship into a mess Shinzo Abe is trying to muscle small enterprises into paying higher salaries that they cannot afford. More business closures and retrenchment ahead. This is what Shinzo Abe wants? To destroy the last backbone of Japan's economy? How much longer can the people tolerate his nonsense?

Please, rise salary in 10%, then I agree to rise taxes in 8!

The only problem is that it does not go far enough. I remember back when this type of article was about how companies are not raising wages someone already proposed a shaming plan similar to this one. Now the Japanese government actually does it it gets blasted.

It may be a bit socialist, but most governments have concluded that some socialist things like "minimal wages" or welfare is a good idea.

I'll go one step further to "bully" those companies (by the way, by most standards Companies are on the Strong side versus the workers, so saying they are bullied is like saying a teacher restraining a bully is bullying him). I can kind of understand corporate cuts in an attempt to kickstart the economy, but at least let's restrict it to those who raise wages or at least do something other than hoarding it for a downturn somewhere down the line - let's make a subsidy contingent on wage rises or proof of capital investment (preferably in country).

Japan needs to pull together if it is to have any chance of getting out of the dumps.

Such a joke! How many of you have actually ever read any press releases of Japan's Trade Ministry?? I thought so. Well then: are the national newspapers or NHK going to publicize daily lists of the thousands and thousands of companies who aren't buying into Abe's "irrational exuberance?" That might make for rather "depressing" reading!

Anyway, Abe's premise is itself flawed: does he actually think that if some lucky sarariman gets a 2,000 yen monthly raise, they're automatically going to go nuts in their spending patterns or feel better about the wider economy slipping back into recession all around them? Seriously? (In the latest such sign, the Bank of Japan reported only two days ago that in spite of Japan's "weak yen" policy, the country's exports have leveled off recently, a reversal of the recovery the central bank saw in February.)

Just think about it for a minute: even if you're lucky enough to have 300,000 yen left in monthly spending after income tax, local tax, unemployment tax and pension contributions have all been deducted (and according to most polls, most Japanese workers are NOT so fortunate), the extra 3% the government will now take in sales tax is equivalent to 9,000 yen on that disposable 300K income...in other words, a negative loss in spending power of 7,000 yen each month!

In the end, if any rational company concludes that rough times are ahead or that international competitive pressure prevents them from doling out more to their workers, no amount of social coercion on the part of a desperate government will get them to voluntarily commit business suicide for the sake of a half-baked economic theory called "Abenomics."

I fail to see what is nefarious about a government doing something to try to boost the wages of its citizens. The only real problem with it in that regard is how weak and ineffective a mechanism it is

Government's role is not to run business, full stop.

Government's correct role is to make for conditions conducive to doing business. That is what will boost demand for labour in this country and by boosting demand for labour upwards pressure on wages could be expected - then the government could expect some kudos.

But unfortunately the government here already meddles in business too much, is reluctant to pull back for fear of upsetting the vested interests, so businesses already can't do this or that because of the socialist heavy-handed regulations. Now on top of that the government has the gall to tell businesses to raise wages "or else"?

This is insanity. Before I was prepared to give Abenomics some benefit of the doubt, but Abe's team now appears to have abandoned doing what they said they would do, and just asking business (and shareholders) to take it up the rear to absolve the politicians of their responsibility to do their job. And this at a time that the government wants to encourage first time investors into the stockmarket? They will kill the 2014 class of first time investors with anti-business actions like this.

It's really time for Amari to get back on message. Where is the Abenomics you want us to buy? Cos I for one am not touching this.

fxgai , you dont have much choice there , tax is going higher for employees and tax cuts which the companies have lobbied for are introduced, as such they are encouraging first time investors and stimulating the companies and hey that what they wanted. To preserve the balance though, wages should go up, forcibly if there is no other choice, and nothing wrong with a bit of a kick in the but to a private sector.

I think PM Abe should have raised the Minimum wage as tmarie posted in response to an earlier article

Why don't they just rise the minimum wage? That would benefit all the part time workers etc. The people who get huge bonuses such as employees of Toyota are a minority, the people who work for minimum wage without proper contracts and benefits are a majority, obviously big scale employers of those people, for example convenience store chains would dislike this a lot.

Increasing minimum wage would probably be the next step if companies dont comply ,which is good for low wage employees but will do nothing for middle class which is the economical majority.

Alex Einz,

fxgai , you dont have much choice there

Sure I do, my investment money is still mine (at the moment). I'm not buying this "Abenomics" until I see some serious 3rd arrow and they knock if off with this central planning wage controls nonsense.

nothing wrong with a bit of a kick in the but to a private sector.

Well look, it discourages me from putting my spare cash into the Japanese markets. It's my investment money, not my charity money. I expect to see some benefits for Number One too, if I put it to work.

Utrack, Jan Claudius Weirauch, Alex Einz,

A minimum wage hike would potentially see entry level workers lose their jobs. It's the wrong way to go about it. The government should make for conditions that will drive up the demand for labour, not hike the price of labour - that would reduce demand for it. Such a move as that would discourage me even more from investing my extra cash.

I am trying to think of why the public should be uninformed about which companies won't raise their wages and I cannot think of a singe reason why. Being a private company does not mean absolute secrecy about financial decisions is guaranteed.

Perhaps the government should simply list all companies involved and indicate which companies increased wages and which didn't, that way it at least appears to be neutral information.

Sure I do, my investment money is still mine (at the moment). I'm not buying this "Abenomics" until I see some serious 3rd arrow and they knock if off with this central planning wage controls nonsense.

What makes you think a "3rd arrow" will work given the response to the first arrow. Abe has already inserted the arrow with the most universal appeal. The proverbial 3rd arrow is a bunch of pet theories for "structural reform" and requires even more cooperation from industry, including some sacrifices.

In any case, the problem is that industry just isn't cooperating for short-term, parochial, tactical reasons. In the end, they all lose.