Labour reform will unlock Japan's growth potential

Subject

The Abe government's economic policy.

Significance

Prime Minister Shinzo Abe has unveiled several extensive economic policy proposals, including a new set of 'three arrows' that was quickly dubbed 'Abenomics 2.0'. Media paid little attention to the new policy proposals, focusing instead on Abe's decision to postpone the consumption tax increase scheduled for next April until October 2019.

Impacts

• Parliament is likely to raise the minimum wage 3% during its next session, with similar rises in the future.
• Reducing the gap between regular and non-regular workers would transform the labour market, benefiting young, elderly and female workers.
• Improved job prospects for women would boost fertility by increasing family income and raising women's bargaining power within the family.
• Extending government welfare schemes to part-time and non-regular workers would add flexibility to labour markets and improve productivity.