Japan’s prime minister urges faster wage increases to avoid ‎stagflation

Japanese Prime Minister Fumio Kishida on Thursday called on business leaders to accelerate the pace of wage increases, warning that the economy risks falling into stagflation if wage increases lag behind price increases.

According to “Reuters”, Kishida said at the new year’s meeting of three of the major lobbying groups in the business field, “There are alarm bells warning of stagflation if wage increases lag behind price increases.”

Inflationary stagnation is accompanied by a decrease in economic growth and an increase in inflation, which negatively affects the purchasing power of families

“The essence of a healthy economic cycle is wage growth,” Kishida said. I call for wage increases to overcome inflation, and the government will support such efforts.”

He added that basic guidelines will be drawn up in June to increase flexibility in the labor market, making changing jobs and moving to high-growth sectors a more attractive idea for employees and workers, who are accustomed to the concept of jobs for life.

The government pledges to spend 1 trillion yen ($7.5 billion) in the next five years on upskilling and qualifying workers, while encouraging companies to make wage scales more flexible.