EDITORIAL: Abe’s plan to stoke economic growth still lacks vital specifics
Prime Minister Shinzo Abe’s government has cobbled together a package for its key policy of creating a “society where 100 million people play active roles.”
The package, announced on May 18, is designed to revive Japan’s economic growth by pumping up consumer spending. The government has pledged to achieve the policy goal by taking steps to heighten the livelihood security of people, mainly in the social security area, so that they will feel safe about spending. This is a recipe for “a virtuous cycle of growth and distribution,” the Abe administration says.
While the package contains a broad array of measures, its focus is on labor and child and nursing care.
The goals set for this policy agenda include: realizing the “same pay for same work” principle and a minimum wage of 1,000 yen ($9.20) per hour to improve the fortunes of nonregular workers; cutting long working hours; and raising the wages of child-care and nursing-care workers to ease labor shortages in these sectors.
These are all important policy issues the government has been tackling for many years without much success. Clearly, the government should accelerate its efforts to achieve these goals.
But none of them is easy to accomplish, and there is no clear and specific road map to the goals.
With an Upper House election drawing near, the policy package will certainly be criticized as a mere attempt to garner votes if the Abe administration fails to make serious efforts to achieve the ambitious goals it has announced.
The initiative will serve as an acid test of Abe’s commitment to the policy goals and ability to deliver on his promises.
The administration has pledged to revise the related laws to ensure “same pay for same work.” But it needs to first offer a clear definition for what constitutes unreasonable disparities in pay.
The “same pay” principle should not mean that the generally low wages of nonregular workers will become the standard. This creed should lead to a general rise in wage levels.
Long working hours have been cited as a stumbling block in Japanese people’s efforts to continue working while rearing children or caring for aged parents.
The administration says it will assign a labor ministry council to the task of deciding whether the related regulations should be changed.
But the administration, for its part, should first lay down basic principles for the reform, such as the introduction of ceilings on working hours.
Increasing the number of day-care centers and nursing-care homes would be meaningless unless they can attract workers.
The government has taken a step in the right direction by deciding on wage hikes for child-care and nursing-care workers in the next fiscal year.
But it has postponed the vital decision on how to finance the step, estimated to cost 200 billion yen, until the year-end season for formulating the budget for fiscal 2017.
As for the education area, the administration has stopped short of proposing a scholarship program that doesn’t require repayment, an idea that has been attracting much public attention. Again due to financing problems, the administration has only promised to consider the idea.
Some policymakers are calling for using the increase in tax revenue from the effects of Abe’s expansionary economic policy, known as Abenomics. But this is far from stable financial resources for vital policy measures.
It would also be wrongheaded to cut spending on other important policy programs to secure funds for these measures.
The government has long promised to expand child-care support as part of its “integrated tax and social security reform.”
But the initiative will face a fund shortfall of 300 billion yen even if the consumption tax rate is raised to 10 percent as planned. The government has yet to devise a plausible plan to fund measures to carry out its promises, such as increasing child-care workers.
The government should raise the consumption tax rate to 10 percent as scheduled as the first step in tackling this challenge. It should also confront the reality that the tax hike will not be enough to secure necessary funds to expand child-care support.
If it is really committed to dealing with this policy challenge in a responsible manner, the government should steadily implement the proposed measures while showing taxpayers a convincing financing plan.