A s signs emerge that major Japanese companies may be ready to accept Prime Minister Shinzo Abe's call for wage hikes that reflect improved earnings, it is uncertain whether the pay increases will be broad enough to benefit employees at smaller businesses. Nor can the growing ranks of so-called irregular workers, who are employed on a part-time basis or on temporary contracts with low pay and little job security, necessarily expect to gain.
The Abe administration, while pushing for a 2-percent inflation target in two years, has made an unusual plea for companies to increase workers' wages. While the yen's fall, brought about by monetary easing, has benefited some export-oriented firms, households have borne the brunt of higher prices caused by the weaker yen, and will even higher prices when the consumption tax rate is raised to 8 percent in April from the current 5 percent. A slump in consumer spending due to the tax hike could derail the prime minister's bid to get the Japanese economy out of deflation.
Top executives of some firms, including Toyota Motor Corp., have responded by indicating — unusually well before their talks with unions begin — that they are ready to consider pay increases next spring. Hitachi Ltd. Chairman Takashi Kawamura suggested that raising the pay scale will be an option.
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