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Economics

Japan’s Latest Move to Rejig Capitalism Focuses on Wages

  • Ruling party unveiled bigger tax incentives for pay raises
  • Economists say measures need to come with a plan for growth
Fumio Kishida, right, with Yoshimasa Hayashi, Japan’s foreign minister, at the lower house of parliament on Dec. 6.
Fumio Kishida, right, with Yoshimasa Hayashi, Japan’s foreign minister, at the lower house of parliament on Dec. 6.Photographer: Kiyoshi Ota/Bloomberg
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Prime Minister Fumio Kishida followed last month’s record economic stimulus package with a move to boost worker pay as part of his campaign to revamp Japanese capitalism so prosperity is shared more widely and growth is more sustainable.

Japan’s ruling party on Friday unveiled a set of carrots and sticks that use the tax code to try to coax businesses into raising worker pay and punish those that don’t.