Wage Policy：Recent Wage Trends and Inverse Incomes Policy

Abstract

An incomes policy is a state intervention into labour-management wage negotiations, and it is aimed at curbing wage raises in order to fight inflation. In a word, incomes policy is a “nominal income （wage） suppression policy”. On the other hand, the wage policy conducted by the Japanese Government in recent years is a state intervention into labour-management negotiations seeking to raise wages in order to fight deflation, and as such is a nominal income （wage） promotion policy. In this sense, it is appropriate to call the government’s policy an interventional wage increase policy, or simply, an “inverse incomes policy”. Why has the Government adopted such a historically unusual wage policy ?In this report, we will examine wage trends in recent years and strive to grasp the mechanism of wage determination in modern Japan. Then we will divide the “inverse incomes policy” into （１） the minimum wage increase policy and （２） the standard wage increase policy, and discuss the progress, significance, and limitations of these two approaches.