Millions of Japanese workers are taking home their smallest share of corporate income in two decades as companies build record cash hoards and abstain from substantial wage raises seen by Japanese Prime Minister Shinzo Abe as critical to a durable economic recovery.
A seasonally adjusted estimate by the independent NLI Research Institute shows worker compensation fell as a percentage of corporate income last year to the lowest level since 1991. By contrast, companies piled up ¥332 trillion (US$2.75 trillion) in internal reserves as of the end of last year on the back of record profits, while increasing the number of low-paid, non-regular jobs to curb fixed personnel costs.
Take-home pay as a share of company income has declined since Abe took office in late 2012 as profits grow while risk-averse employers resist his call to boost wages and end two long decades of deflation.
Japan ranked below the US, Britain, France and Germany in payroll expenses as a ratio of GDP as of April-June last year, according to calculations by the Japanese Cabinet Office based on Organisation for Economic Co-operation and Development statistics.
Although Japan’s economy emerged from recession in the last quarter of last year, many companies are looking for signs of sustained economic growth before committing to a decision to raise salaries.
Labor unionists are seeking much higher salary increases this year as they meet with their employers during the so-called shunto, or annual wage negotiations, this month.
Analysts warn that caution about raising wages could create a vicious cycle of shrinking domestic demand and diminished economic growth prospects.
“Unless wages are raised in a sustainable way, domestic demand and consumption will continue to languish, preventing companies from finding profit opportunities at home,” NLI Research Institute director of economic research Taro Saito said.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
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