Japan is going in for a reality check on the current economy. With a graying society and retiring labor force with tons of public debt, useless public projects, and obsolete employment models, I just want to know why it seems like nobody here seems to understand that the standard employment procedures here in Japan is not streamlined to spur growth for the economy.
Most of corporations are so keen on hiring temporary workers because they don’t need to pay the extra costs of benefits that companies are supposed to pay for their “real” employees. They use these so-called favored temporary employees and throw them without them building any specific skill set for any future purpose. it seems funny that many business despise raising the wages yet support the increase in prices of commercial goods.
Furthermore, Japan’s way of doing things with applying for a job is so outdated, it’s a paradox for a country that prides it self with advanced robots and cars. I think it’s a waste of time that a majority of prospective employees still need to mail in application papers that requires your hanko (stamp seal), several photographs, a hand-written resume, and other crap for major corporations. It seems so outdated given that fact we live in the digital age. But I guess its culture; or is it close-mindedness? This is just one of many problems I’m pointing out.
Countries like South Korea have gotten rid off all the useless crap and streamlined the entire process so that prospects can easily apply for a job. They optimized their employment procedures so that they can justify their wage policies. However, Japan’s wages are too low compared to the domestic inflationary policies that are happening. Although it is true that Japan is a country of people who save money instead of spend money, I don’t think that increasing the tax rate and the prices of all consumer goods is the best way to get the Japanese to start spending their money.
A good way is opening up Japan’s markets so that they can compete with other countries is the best way to spur competition and in theory, naturally make better products for society that seem very attractive to have, that consumers will buy.
Japan is way behind other Asia-Pacific markets in terms of wage growth and it makes no sense to increase the tax rate while inflating prices.
2 thoughts on “The Financial Future of Japan”
They need to open up ALL their markets to outside competition.
The Japanese need to learn from other countries that deregulation and the cutting of spending may help the Japanese economy but to a certain extent. What makes Japan different from other struggling first world economies is that the population is declining so it puts more pressure on the Japanese than ever before.
With their closed doors to immigrants and somewhat xenophobic attitude towards outsiders in to their economies, Japan really needs to change their attitude.
hard to say
Thanks for the reply Jacob.
Honestly, I don’t think the answer is clear. I agree that deregulation will help but it was the tight regulatory policies that saved Japan from the global financial crisis back on 2008.
But then again, because Japan became a monetary haven, it strengthened the yen causing exporters to lose out on profits.
This game is a double edge sword and it is interesting what Japanese policy makers have in mind to prevent Japan’s finances from collapsing.
As of now, it seems like Abe and his Ecnomic minister Amari is doing a good job.