TOKYO – Japanese Prime Minister Fumio Kishida took office last October promising a “new capitalism” to end deflation and boost living standards. Ten months on, the enterprise already looks rather old.
The problem: Kishida’s Liberal Democratic Party (LDP) is placing its bets on a 31 yen per hour boost – a paltry US$0.23 – in the minimum wage. It’s a gambit that’s neither new nor particularly capitalist nor likely to catalyze the virtuous cycle of rising consumer demand Tokyo now desperately needs.
To be sure, there’s merit to raising the minimum hourly pay from the current 961 yen, or US$7.20, during the current fiscal year ending in March 2023. Yet two big concerns are already undermining what Kishida’s party is spinning as an epochal achievement.