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Prospects uncertain for “new three arrows” after two months

  • 2015-12-09 15:00:00
  • , Tokyo Shimbun
  • Translation

(Tokyo Shimbun: December 9, 2015 – p. 3)

 

 By Kei Ganaha

 

 Two months have passed since Prime Minister Shinzo Abe declared a “dynamic society of 100 million people” as the slogan of his third cabinet. He set forth the following “new three arrows” as the targets to realize this slogan: (1) GDP of 600 trillion yen; (2) birth rate of 1.8 for couples wishing to have children; and (3) zero job separation for nursing care reasons. The government plans to make relevant allocations in the FY2015 supplementary budget and the FY2016 budget. Yet, doubts continue to be voiced about the lack of a clear vision.

 

 The emergency measures compiled by the government’s council for the empowerment of all citizens call for achieving a nominal GDP of 600 trillion yen by around 2020 or an annual economic growth rate of at least 3%. Abe has also ordered that minimum wage be increased by 3% each year. He is also reducing the effective corporate tax rate ahead of schedule. He envisions improving business competitiveness and promoting wage increases to expand consumption, in order to boost economic growth.

 

 However, the last time Japan achieved a 3% growth was in 1991 during the economic bubble. The business sector also thinks that “600 trillion yen GDP is not feasible,” as Keizai Doyukai (Japan Association of Corporate Executives) Chairman Yoshimitsu Kobayashi pointed out.

 

 The targets of a birth rate of 1.8 and zero job separation for nursing care reasons are meant to create an environment that enables people to maintain balance between work and childcare or elderly care. Childcare facilities for an additional 500,000 children and nursing care facilities, such as special nursing-care homes for the elderly, for 500,000 more users will be built by the early 2020s.

 

 The problem is manpower. The income of childcare and nursing care providers is generally lower than workers in other sectors, resulting in a labor shortage. Even if new facilities are built, there may not be enough employees to staff them.

 

 There is also an opinion that the Abe administration’s goal to reduce social security spending and the policies to empower all citizens that require massive funding are contradictory. The government has just reduced fees paid to nursing care facilities and implemented stricter requirements for entering special nursing-care homes in April. Welfare benefits have also been cut.

 

 In the area of labor policy, amendments to the Manpower Dispatching Business Law were passed that may further increase the number of non-regular employees, who are less likely to benefit from wage increases. The government also submitted a bill on introducing a “zero overtime pay” system that may increase long working hours.

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