New Japanese PM Eyes Wage Hikes to Grow Economy

Newly elected Liberal Democratic Party (LDP) President Fumio Kishida pledged that he will work on increasing incomes as soon as he becomes Japan’s prime minister.

Kishida said on Sep. 30 that he believes that the only way for Japan, the world’s third-largest economy, to recover from its pandemic shock is by raising incomes and getting modest families to spend more.

Kishida has repeatedly asserted his plans for a “new capitalist system” in Japan that focuses on more equitable distribution of wealth.

“Unless the fruits of growth are properly distributed, a ‘virtuous cycle of growth and distribution’ cannot be realized,” Kishida said, adding that his strategy to tackle wealth inequity will be by raising incomes.

Economists are skeptical, however, since former prime ministers Shinzo Abe and Yoshihide Suga failed to raise incomes during their terms, saying Kishida must first make clear the kind of policies he will use to get businesses to increase their wages.

The soon-to-be prime minister said that his top priority is the economy, revealing plans to propose stimulus programs worth several hundred billion dollars.

While Kishida has pointed out how Abe’s economic policies — dubbed “Abenomics” — “lacked trickle-down effects”, analysts have said that the new LDP leader is unlikely to stray from Abe’s heavy stimulus strategy.

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