Abe Pushes for Wage Growth to Boost Economy

Prime Minister Shinzo Abe once again on Tuesday urged business leaders to raise wages this year to help get the economy out of more than a decade of deflation.

Speaking at a New Year’s celebration organized by three major business lobby groups, Abe said his administration’s plan to lower the corporate tax rate should help create room for companies to offer higher salaries.

The ruling coalition decided in late December to reduce the effective corporate income tax rate of 34.62 percent to 32.11 percent in fiscal 2015, and to 31.33 percent in fiscal 2016.

“We’d like to aim for further cuts in the future,” Abe said, adding the possibility of an additional reduction “hinges on everyone here.”

He said the administration will consider further reductions if the 2.51 percentage-point cut in the fiscal year starting in April helps lift wages, spurs capital spending, strengthens companies’ competitive edge and improves employment.

Many corporate executives expressed willingness to accept pay hikes in the annual wage talks this spring, but others say it will be difficult.

Hisao Tanaka, president of Toshiba Corp., told reporters at the celebration that it is “100 percent” possible that his company will approve pay raises.

via Japan Times

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza