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Abe urges wage increase for Japan’s workforce in effort to spur consumption

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Shinzo Abe
Asia   Prime Minister Shinzo Abe

Prime Minister Shinzo Abe on Wednesday asked business leaders to raise wages to spur consumption and mitigate the impact of next October’s planned sales tax hike, the sixth consecutive year he has requested such an increase.

“I would like to request a wage hike that will further cement the upward momentum of the economy,” Abe told business leaders at a meeting of the Japan Business Federation, the country’s most powerful business lobby, also known as Keidanren.

Abe said he would refrain from proposing a specific figure for wage hikes, but cited the average of 5 percent in 1989, around double this year’s number, as a target.

The prime minister made the request ahead of annual wage negotiations between management and labor unions that take place in the spring, with an eye on countering any slump in domestic demand predicted to come when the consumption tax is increased to 10 percent in October from the current 8 percent.

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