(Adds comment, detail, background)
By Tetsushi Kajimoto
TOKYO, March 29 (Reuters) - Japan will draw up a plan in
June on "new capitalism", focusing on wage increases, innovation
and resolving social problems through support for start-ups,
Prime Minister Fumio Kishida said on Wednesday.
"First of all, we will aim to compile guidelines by June
with regard to labour market reform including reskilling workers
and facilitating labour turnover," Kishida told a panel tasked
with implementing the plan.
Kishida first launched the idea of a "new capitalism" when
he became prime minister in 2021, pledging to fix distortions in
the world's third-largest economy, and signaling a shift away
from reflationary policy, saying there was no growth without
redistribution.
He said he called it "new capitalism" because of the need to
solve downsides such as widening inequality.
By pushing structural wage increases, Kishida said on
Wednesday Japan would strive to narrow wage differentials
between domestic firms and rivals overseas, while taking
different economic situations into account.
Kishida places human capital investment at the core of his
growth strategy as rapidly-aging Japan faces an acute labour
crunch as its working-age population shrinks.
Under pressure from Kishida, major companies have concluded
their annual labour talks with average wage increases of 3.8%
for the next fiscal year, the biggest rise in about three
decades, although the outlook seems less positive for workers at
smaller companies, which account for almost 70% of the
workforce.
Salaries have been virtually unchanged since the late 1990s
and are now well behind the average for the OECD group of rich
countries.
(Reporting by Tetsushi Kajimoto
Editing by Raissa Kasolowsky, Robert Birsel)
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