TOKYO -- Still searching for a way to revive economic growth, Prime Minister Shinzo Abe's government is putting renewed emphasis on higher labor force productivity and solutions to demographic decline.
Abe reaffirmed two goals Wednesday at a meeting of his Council on Economic and Fiscal Policy: lifting economic output to 600 trillion yen ($5.44 trillion) by fiscal 2021 and making a clean break with deflation.
His government released a draft of its basic policy for economic and fiscal management. The final version, which the cabinet is expected to approve on May 31, will reflect a newly released plan for increasing economic participation, as well as input from councils on industrial competitiveness and deregulation.
To boost gross domestic product, which came in at roughly 500 trillion yen in the fiscal year to March, the government proposes an assortment of growth initiatives. They include accelerating the spread of the "internet of things," promoting networks of "smart factories" and supporting the development of automated driving systems to reduce road congestion. These and other such measures could generate 30 trillion yen in annual economic value by 2020, according to government estimates.
Targets for inbound visitors have been set at 40 million in 2020 and 60 million in 2030. The government wants spending by foreigners in Japan to reach 8 trillion yen and 15 trillion yen, respectively, in those years.
When it comes to changing the way Japanese work, the idea is to make efficient use of a shrinking labor pool. Excessive work hours will be put on notice: the threshold at which employee overtime triggers on-site inspections by labor standards enforcers will drop to 80 hours per month from 100.
The Abe government also seeks to better the lot of Japan's roughly 20 million "non-regular" workers, who include contract employees and part-timers. Guidelines will be written up to determine improper wage and other disparities in job conditions. The government aims to propose the necessary labor law amendments by fiscal 2018.
Non-regular workers in Japan earn only 60% as much as regular employees. The government aims to bring the figure up to 70-80%, in line with the major European economies. Tokyo reckons that putting more money in their pockets will stimulate consumer spending, promoting a virtuous cycle of consumption-driven growth.
To achieve a fertility rate target of 1.8 in fiscal 2025 -- a level supposed to equate to every woman having all of the children she desires -- child care availability is to be expanded. The government wants to increase the mandated capacity of workplace and small-scale kindergartens by fiscal 2017, creating space for an additional 500,000 children. To help attract workers to this field, licensed child care professionals would receive pay increases averaging about 6,000 yen a month, with a 40,000 yen raise for highly experienced ones.
The government also wants to give providers of nursing care, another understaffed sector, raises of 10,000 yen per month on average. This is part of a goal of ensuring no one is forced to give up employment to take care of an infirm loved one.
The proposals in the economic participation plan would require an estimated 200 billion yen or more in funding. The government envisions paying for this out of an increase in tax revenues that it attributes to Abenomics.