TOKYO – The year 2013 saw the Japanese economy turn the corner on two decades of stagnation. And the future will become even brighter with the appearance of what we are calling the “wage surprise.”
Intensive discussions since September among Japanese government, business, and labor leaders have been geared toward setting in motion an upward, virtuous cycle whereby increased wages lead to more robust growth. I have taken part in two of the four meetings so far, joining our finance minister, economy minister, and labor minister, as well as industry and labor leaders like Akio Toyoda, the head of Toyota Motors, and Nobuaki Koga, who leads the Japanese Trade Union Confederation. Each time, I have come away from the meeting feeling confident and invigorated.
Let’s face it. Deflationary pressure in Japan – and only in Japan – has persisted for well over a decade. At the beginning of my premiership, I launched what observers have called “Abenomics,” because only in my country had the nominal wage level remained in negative territory for a staggering length of time.
I was appalled when I first saw the statistics: Japan’s wage level since 2000 has fallen at an average annual rate of 0.8%, compared to average nominal-wage growth of 3.3% in the United States and the United Kingdom and 2.8% in France. In 1997, wage earners in Japan received a gross total of ¥279 trillion; by 2012, the total had fallen to ¥244.7 trillion.