January 4, 2013
Akahata editorial (excerpts)
The new year started amid the prolonged recession of the Japanese economy. The need now is a drastic change in the economic system, which sacrificed people’s livelihoods for the sake of increasing the profits of large corporations.
Uncertain ‘Abenomics’
The domestic economy has not been able to recover from the so-called “deflation-led recession” with the absence of economic growth and the continued drop in prices. Large corporations have held down workers’ wages and employment, which led to a slump in personal consumption, the foundation of domestic demand. This is the true cause of the long-period recession.
In order to reestablish a “strong economy”, Prime Minister Abe Shinzo’s cabinet promotes an “Abenomics” economic policy, which is to implement bold monetary relaxation and expand public works projects. However, growth in consumption is the key to economic recovery. To issue more national bonds and expand unnecessary public works projects will only worsen financial conditions.
An increase in the consumption tax will take place in April 2014. Unless the tax hike plan is cancelled, and higher wages and more jobs encourage consumers to spend more, the economy cannot be restored.
As ways to recover the domestic economy, the Japanese Communist Party has demanded that social security programs be improved without depending on the consumption tax and that citizens’ incomes be increased. To have larger companies and wealthier individuals pay their fair share in taxes as well as to have major firms use a part of their internal reserves to increase workers’ salaries and jobs are internationally recognized as appropriate and effective economic policies.
The International Labor Organization (ILO)’s “Global Wage Report” points out, “If competitive wage cuts are pursued simultaneously in a large number of countries, this may lead to a ‘race to the bottom’ in labour shares, shrinking aggregate demand.” The Japanese government has a grave responsibility for doing nothing to discourage continuous wage cuts.
Government policies in favor of business circles must be changed in order to increase wages and jobs as well as to restore the people’s living conditions.
The new year started amid the prolonged recession of the Japanese economy. The need now is a drastic change in the economic system, which sacrificed people’s livelihoods for the sake of increasing the profits of large corporations.
Uncertain ‘Abenomics’
The domestic economy has not been able to recover from the so-called “deflation-led recession” with the absence of economic growth and the continued drop in prices. Large corporations have held down workers’ wages and employment, which led to a slump in personal consumption, the foundation of domestic demand. This is the true cause of the long-period recession.
In order to reestablish a “strong economy”, Prime Minister Abe Shinzo’s cabinet promotes an “Abenomics” economic policy, which is to implement bold monetary relaxation and expand public works projects. However, growth in consumption is the key to economic recovery. To issue more national bonds and expand unnecessary public works projects will only worsen financial conditions.
An increase in the consumption tax will take place in April 2014. Unless the tax hike plan is cancelled, and higher wages and more jobs encourage consumers to spend more, the economy cannot be restored.
As ways to recover the domestic economy, the Japanese Communist Party has demanded that social security programs be improved without depending on the consumption tax and that citizens’ incomes be increased. To have larger companies and wealthier individuals pay their fair share in taxes as well as to have major firms use a part of their internal reserves to increase workers’ salaries and jobs are internationally recognized as appropriate and effective economic policies.
The International Labor Organization (ILO)’s “Global Wage Report” points out, “If competitive wage cuts are pursued simultaneously in a large number of countries, this may lead to a ‘race to the bottom’ in labour shares, shrinking aggregate demand.” The Japanese government has a grave responsibility for doing nothing to discourage continuous wage cuts.
Government policies in favor of business circles must be changed in order to increase wages and jobs as well as to restore the people’s living conditions.
