1 Most Japanese firms plan no wage hike (Straits
Times) Nearly two-thirds of Japanese companies do not plan to hike their
workers' wages this year, a Reuters poll showed, a blow to Prime Minister
Shinzo Abe's campaign for higher pay to spur a recovery and a way to end two
decades of deflation.
The survey also found that most wage gains over the
past four years since Abe came to power have been minimal and that nearly
one-quarter of firms have implemented none at all. In each of those four years,
just before labour and management kick off their annual "shunto"
talks Abe has urged companies to raise wages to boost households' purchasing
power and stimulate spending.
But Japan Inc has generally resisted Abe's plea.
Although the yen has weakened recently, many companies were hurt badly by last
year's spike in the currency and are loath to commit to higher wages in the
face of uncertainty amid threats about trade barriers by new US President
Donald Trump.
As such, companies appear to opt to reward employees
with one-off bonus payments after profits are secured, rather than promising a
base pay raise. In Japan the base salary accounts for the bulk of monthly
wages. Base pay rises had been virtually frozen for over a decade since the
early 2000s, until Abe swept to power in late 2012 with a pledge to reboot the
moribund economy.
2 New robot revolution will take boss’ jobs (Larry
Elliott in The Guardian) Advances in artificial intelligence (AI) mean a second
wave of change is approaching – and this time the jobs at risk from the
machines are going to be jobs in the service sector.
As Dhaval Joshi, economist at BCA Research, has
noted, it is not going to be the low-paid jobs in the service sector such as
cleaning, gardening, carers, bar staff or cooks, whose jobs are most at risk.
That’s because machines find it hard to replicate the movements of humans in
everyday tasks.
The first army of machines wiped out well-paid jobs
in manufacturing; the second army is about to wipe out well-paid jobs in the
service sector. In many cases, the people who will be surplus to requirements
will have spent many years in school and university building up their skills.
Humans are still more innovative and entrepreneurial
than machines, which means there will be rich rewards for the creative. They
will be few in number, however, so the dynamic of recent years – exceptionally
high rewards for those at the top, a hollowing out of the middle class, and the
expansion of low-paid insecure jobs at the bottom – will not just continue but
become more pronounced.
This fourth industrial revolution, just like all the
others, will lead to a growth spurt. But the last big epoch of technological
change was accompanied by political change that ensured those making the cars,
the washing machines and the TV sets could also buy them. Full employment
policies, capital controls, progressive income tax and strong trade unions
ensured this was the case.
3 A radical idea to defeat poverty (Simon Copland on
BBC) This month Finland is embarking on a radical economic experiment. Its
government is giving 2,000 people free money for two years, guaranteeing them a
minimum income. The participants – selected at random from people receiving
welfare – will each get 560 euros ($600) a month and they will continue to
receive the money even if they get a job.
The Finnish trial is the largest of a number of
experiments looking at what happens when you give every citizen a guaranteed
income – a policy known as universal basic income. It’s a simple proposal, but
a radical one. Some dislike the idea of governments handing out money
indiscriminately. Others worry that guaranteed incomes could make it hard to
find people willing to do necessary but unpopular jobs.
Yet the policy is gaining support around the world,
from Silicon Valley to India. In the wake of the global financial crisis of
2008, many now see a universal basic income as the best way to reform struggling
welfare systems, and to deal with the overwhelming economic challenges most
countries are facing.
Influential 20th Century economists Milton Friedman
and Friedrich Hayek both thought that some form of guaranteed income was the
best way for governments to alleviate poverty. With social welfare coming under
increasing financial and political pressure, some see basic income as an
obvious solution. Providing a basic income can actually be cheaper than
existing welfare systems, mainly because a uniform payment provided to all is
cheaper to implement and monitor.
Yet many have returned to the idea today because
they see a basic income as a way to buffer people from a global economy in
flux. The shockwaves of the 2008 financial crisis still linger. But there are
also growing fears about the threats posed by automation, as robotics and
artificial intelligence move into workplaces.
Not everyone likes the idea, however. A referendum
in Switzerland last year rejected a proposal to give 2,500 Swiss francs
($2,418) a month to every adult and a quarter of that amount to children. Those
who opposed the plan argued that it would be unaffordable and would encourage
people to drop out of work, especially those with low-paid manual jobs. Who
would choose to be a cleaner or a rubbish collector if they did not have to?
But those in favour of basic income say it could
force society to reassess the value of such roles and the rewards offered to
those who do them. Indeed, a guaranteed income – even a supplementary one –
could challenge the idea that people are only valuable members of society if
they work.
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