During his re-election campaign, current Japanese Prime Minister Shinzo Abe promised that during his time in office, his administration would turn Japan’s rapidly deflating economy around.
His most recent plan of action has been to work together with unions and corporate owners to reach some sort of compromise to increase the wages of workers to match the prices of the products they make.
“What we want is for wages to rise more than prices,” PM Abe said in an interview in the official prime minister’s estate in Tokyo. “We want to enter a virtuous cycle as quickly as possible,” in which the profits earned by corporations assist the economy and not the other way around, employers do not take advantage of their power to exploit their workers, and employees are able to afford the very items they produce, he stated.
Amongst the companies that responded enthusiastically to his call for action has been Japan’s largest manufacturer, Toyota, which only last month predicted a 74%, or 1.67 trillion yen, or $16 billion, increase in their net income, largely assisted by a recent increase in car exports.
Shino Yamada, spokeswoman for the Toyota City, the branch of the company that is the world’s largest maker of automobiles had the following to add. “We are aware of the role Toyota and the manufacturing industry as a whole are expected to play in revitalizing the economy.” That is why, she said, that Toyota is stepping forward in this matter. “Based on these expectations, the workforce and management will discuss this issue based on a request from the labor union.”
Japanese Prime Minister Shinzo Abe has praised Toyota and other companies, such as Hitachi, which have taken a stand against the 15 years of deflation which had plagued the Japanese economy. With the support of major corporations and the denigration of the yen, the current administration has managed to raise the Topix Index by 46%.
Taking this road is all the more surprising considering what Toyota has had to face in foreign markets. Because of its insistence that its workers’ wages be increased, Toyota has come to loggerheads with Australian PM Tony Abbot, who is not only refusing to raise wages, but is insisting that the current rates are a drain on the economy.
Australian Treasurer Joe Hockey, when questioned by local media as to what he considered was the problem.
“It is because the Labor Party has made it so damn hard to make anything in Australia. Labor costs are one great example.”
Due to these issues, many speculate that Toyota will relocate from Canberra, which, along with the bankruptcy of Holden, the third largest auto manufacturer in Australia, might be the signs of a recession hitting the country.
It seems pretty clear that Japan has got the right idea: if it boosts the economy and prevents a crash in the stock market, then perhaps it’s time to raise wages so workers can hope to one day buy any car they have worked on.
