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Japan’s wages fall 0.6%

Speaking at January’s Liberal Democratic Party Convention, Prime Minister Shinzo Abe had this to say:

Economic growth is not for business enterprises, it is for the public…Therefore, I would like to do my best to make the economic recovery extend to households.

And, in his January 26 policy speech at the opening of the 2007 ordinary Diet session, Mr Abe said this about Japan’s economic situation:

Now is the time to elevate the Japanese economy to a new stage for economic growth over the medium and long term, and toward that end, we have formulated the “Direction and Strategy for the Japanese Economy,” which lays out the reform goals that we will pursue during the next five years. Under my leadership, we will strongly advance a new growth strategy under this policy so that the people can truly sense for themselves that we are achieving real growth.

Mr Abe, you now have your work well cut out for you; Here is today’s headline:

Japan’s Wages Unexpectedly Drop Most in 16 Months

Unexpected? This observer doesn’t think so; my guess was in the flat to -0.1% range. I was wrong. In fact, in December 2006 wages fell 0.6% against December 2005. Let’s remember: in the third quarter of 2006, corporate profits were up 15.5%, as the average wage climbed 0.1%. Those gains in wages, modest as they were, are now wiped out.

As Bloomberg points out: “Workers brought home an extra 5,500 yen ($45) in total pay in 2006, about enough to buy a case of beer.” Hopefully that case of beer will help you feel that much better about not having the 5,500 yen extra you made last year.

Mr Abe, the clock is ticking. When I read your speeches referenced above, all I see are slogans: “A Beautiful Country,” “Direction and Strategy for the Japanese Economy,” “Asia Gateway Initiative,” “The Japanese Cultural Industry Strategy,” “The Comprehensive Plan for Challenge Again Assistance Measures,” “Program for Helping Striving Regions to Help Themselves,” “After School Hours Plan for Children,” “New Health Frontier Strategy,” “21st Century Environment Nation Strategy,” and “The First Year for Creating a Beautiful Country,” just to choose a few.

What do these mean? I see no nuts and bolts. No targets, projections, numbers, data, figures or even the skeletons of a plan.

Mr Abe, the clock is ticking. It is ticking on you and your sad Cabinet, full of Ibuki (Don’t send me any more letters, suicidal high school students!) and Yanagisawa (Women are birthing machines) and Kyuma (Japan did not support the US-led war in Iraq; it was only Koizumi’s personal opinion) and countless associated others (Honma, Matsuoka, Sata) who have done nothing but abuse their positions.

Mr Abe, you spoke of bringing the economic recovery to households. Now is your last chance. The December data is in. Your policy speeches are out there. Live up to what was said in them, show some form of quick recovery for the households of this country, or else step aside.

By the way: “The median estimate of six economists surveyed by Bloomberg News was for wages to climb 0.5 percent. None predicted a drop.”

I’m not surprised.

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