Japan Press Weekly

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2016 February 17 - 23 [ECONOMY]

Gov’t data provides evidence of failure of ‘Abenomics’

Recent government statistics suggest that the “Abenomics” economic policy for which Prime Minister Abe Shinzo praised himself has been shown to be unsuccessful.

However, Abe still insists, “I will work to further strengthen Abenomics so as to maintain a virtuous economic cycle in which a boost in consumer spending and an expansion of investments are occurring associated with the improvement of job openings and pay hikes” (Lower House plenary session on February 16).

Take a look at the employment situation which he boasted as “being positive”. A labor force survey released on February 16 by the Ministry of Internal Affairs and Communications shows that what has increased is the proportion of non-regular workers. The number of regular employees was 33.07 million in the October-December quarter of 2015, down 230,000 from the same quarter of 2012 just before the inauguration of the second Abe administration. In contrast, comparing the former quarter with the latter, the number of those who work under non-regular contracts was up by 1.72 million to 20.15 million.

The growth in corporate earnings has also failed to “push up wage levels” as Abe trumpeted. A statistical survey the labor ministry published on February 8 reveals that the real wage index in 2015 dropped by 0.9% from a year earlier, marking the fourth consecutive year of decline. The increase in wages hardly caught up with the rising consumer prices, meaning that wage restraints are still continuing in many companies.

What about the “positive growth cycle” that Abe bragged about? It came to light in the government data released on February 15 that Japan’s real GDP growth rate fell in the October-December quarter of 2015, down 0.4% from the previous quarter or down an annual rate of 1.4%, apparently caused by shrinking consumer spending. The increase in the number of low-paying non-regular jobs contributed to dampening consumption.