Japan focuses on accelerating wage growth in fiscal 2023
Raising wages in Japan remains a priority as Prime Minister Fumio Kishida’s government released a draft economic and fiscal policy blueprint for fiscal 2023.
The blueprint highlighted the government’s drive to achieve economic growth supported by wage hikes and wealth distribution at a time when a growing number of companies are raising salaries to keep pace with accelerating inflation.
To support companies in offering higher salaries, the draft plan also calls for more investment in human resources development and labour market reform. Additionally, the government is also looking to support the reskilling of employees and helping them job-hop in search of better employment conditions. Some of the reasons wage growth has been limited in the country, the draft plan said, include lifetime employment and seniority-based systems in corporate Japan.
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Another area the government will be focusing on is childcare support, with 3.5 trillion yen (US$25 billion) annually earmarked to expand childcare support for the next three years to fiscal 2026. In the early 2030s, child policy-related spending is expected to be doubled from current spending.
The increased in spending is expected to be offset by Japan cutting back on crisis-mode spending that was done during the COVID-19 pandemic and the war in Ukraine, reported Kyodo News.