The political economy of the 'New' Abenomics and the 'Japan's Plan for Dynamic Engagement of All Citizens'
Hiroaki Richard Watanabe
(University of Sheffield)
Paper short abstract:
This paper examines the 'New' Abenomics and Japan's Plan for Dynamic Engagement of All Citizens by focusing on the proposed labour market reform. The paper claims that, although the reform may be aimed at improving work conditions, it is more about economic growth based on economic nationalism.
Paper long abstract:
This paper examines the question of what changes have occurred in Abenomics by focusing on the labour market policy and why the Abe administration introduced these changes. The Abe administration announced the 'New' Abenomics in September 2015 and introduced the mostly identical 'Ichioku Sōkatsuyaku' Plan (Japan's Plan for Dynamic Engagement of All Citizens) in June 2016. In addition to the three arrows of the original Abenomics (the monetary policy based on quantitative easing as the first arrow, the fiscal policy based on large public spending as the second arrow, and the structural reform based on neoliberal deregulation as the third arrow), which were combined as the first new arrow aimed at GDP 600 trillion yen, the new Abenomics added two new arrows, with social policies aimed at the higher fertility rate and the lower number of workers who leave job because of elderly care (kaigo rishoku) as the new second and third arrows. As for the labour market reform related to these new three arrows, the Abe administration has proposed to place a limit on overtime work by revising Article 36 of the Labour Standards Law and improve the working conditions of non-regular workers by introducing 'equal pay for equal work' and raising the minimum wage. However, we can identify a contradiction between this reform and the labour market policy such as the deregulation of temporary agency work in 2015, which has made the work situation of temporary agency workers more unstable. In addition, despite being useful for striking a better work-life balance and increasing women's labour market participation, the reform of working hours aimed at reducing overtime and improving labour productivity may result in a structural reform that would contribute to working-time deregulation aimed at lower labour cost. The paper claims that these reform measures are not only about improving work conditions but also about achieving economic growth. The New Abenomics and the Japan's Plan can be characterised a policy based on economic nationalism as part of the Abe administration's grand strategy for revitalizing the economy and achieving Japan's greater role and competitiveness in the global political economy.
Demographics and economic participation