Urgent Measures for Abenomics

An experts’ committee for Shinzo Abe administration called National Convention decided “urgent measures” to promote new three arrows for Abenomics on Thursday. New policy goals included raising minimum wage by annual 3% or hourly wage to ¥1,000 in national average. However, those policy remained to be general distribution of wealth, which had been said to be ineffective for economic growth, as seen in ¥30 thousand benefit for every person. The measures are interpreted as tools to raise popularity of Abe administration for coming national election next summer.

The new three arrows include raising gross domestic products to ¥600 trillion, hopeful birth rate of 1.8 for each couple, and no job loss caused by taking care of the elderly. In the urgent measures, the ¥30 thousand benefit was to encourage low-income families for active consumption. To support higher birth rate, the goal of increasing nurseries in the end of FY 2017 thought to be raised from current 400 thousands to 500 thousands. To decrease 100 thousands of workers leaving job to take care of their old father or mother, nursery facilities or home-visiting service was expected to be increased from current 380 thousands to 500 thousands.

Abe looked serious in implementing his political promise to achieve ¥600 trillion of GDP. “This is a proposal for new socio-economic system to produce positive circulation of growth and distribution,” told Abe in the meeting of National Convention. The policies would be reflected in supplemental budget of FY 2015 or yearly budget of 2016. The administration is going to deliver mid- or long-term plan for post 2020 next spring.

This kind of body for discussion to implement policies is usually controlled by policy experts in Japanese bureaucracy. That was because those new policies did not go beyond the bureaucratic concept of distributing national wealth. Bureaucrats hate abolishing former policies they had made and try hard to maintain old plan. Ministry of Health, Labor and Welfare once set a goal of nursery service for the elderly on 340 thousands by increasing nurseries with special care or overnight stay for nursery staffs. Then, the ministry included 24-hour visiting nursery to raise the goal to 380 thousands. Now they added houses with welfare service for the elderly to nursery facility. To achieve new goal, they are simply manipulating the definition of nursery service.

That is why it is unclear whether those policies really work. One thing clear is Abe has been devoted to achieve two-third majority in the election of House of Councillors next summer. It is likely that the leaders of Abe administration required the ministries to squeeze popular policies to appeal the effort for people’s life. But, the bureaucratic method is apparently obsolete.