As the Japanese government seeks to promote capital investment by private companies, it is also eyeing another way to create an upward economic cycle: teaming up with employers and labor unions to create rules encouraging fluidity in wage levels and employment. Its goal is to spur spending through wage increases.
Officials have expressed high expectations in such negotiations.
“Government-labor-management negotiations included in the growth strategy could form a strategy on a whole new dimension,” one government bureaucrat commented.
In its move, the government referred to the Wassenaar Agreement formed in the Netherlands in the 1980s between the government, employers’ organizations and labor unions after the country fell into an economic slump. Labor unions agreed to accept lower wages in return for stable employment, with the government providing the environment for this to happen. The agreement could be described as a work-sharing policy.
This time, however, the Japanese government is going in the opposite direction. It hopes to have company managers promise to increase wages to a certain degree, and have labor unions accept that employment will become more fluid with a possibility of a temporary increase in unemployment. The government will provide subsidies to support both sides.
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