To shore up his ailing administration, Shinzo Abe is vowing to focus on the economy. But instead of unleashing yet more stimulus, analysts say the prime minister needs to take a hammer to an old chestnut: moribund wage growth.
Facilitating salary increases would boost household income, and for Abe, help convince an increasingly skeptical electorate that his economic policies are working for them. The problem is, employers remain reluctant to boost pay despite record-low unemployment and bumper profits.
Facing two days of questioning along with aides over allegations of cronyism, Abe on Monday signaled a renewed focus on the economy and the quest to raise wages. Failure on that front has left the Bank of Japan shouldering the burden with unprecedented stimulus and still years away from meeting its 2 percent inflation target.
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