Wage hikes: Can Japan Inc. fix what the BoJ can’t?

 Japan’s economic policies over the recent years seem to have added yet another ironic angle to the very conundrum they were meant to solve – its extended deflationary, low/no growth period, dubbed the ‘lost decade’1, when falling prices, among other things, punctured consumers’ appetite to buy.

Even as Japan’s gargantuan stimulus packages, aimed at stoking inflation and – thereby – growth, seemed to offer some hope, its economy now faces the prospect of being pushed into stagflation again, with its hard-fought inflation soaring past wage growth, threatening consumption appetite – this time, for completely contrary reasons.

While the Bank of Japan (BoJ) has for long done the heavy lifting, Japan Inc.’s increasingly cash-rich balance sheets are now being called upon2 to drive wage hikes and, potentially, pay higher taxes. Several companies have already announced wage hikes14, and several more may follow. However, this seems like a quick fix, with long-term solutions likely to entail closure of the stimulus tap, even if only partially and gradually.

https://bizdispatch.com/wage-hikes-can-japan-inc-fix-what-the-boj-cant/


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