Prices of food and other essentials are continuing to rise in Japan, and the government must quickly devise measures to protect the livelihoods of those in need.
Bottled beverages, beers and mayonnaise are just a few among the many items seeing price hikes, while eateries are also rushing to raise the menu prices for hamburgers, beef bowls, doughnuts, and so on.
According to Teikoku Databank Ltd., prices for some 6,500 food items will rise in October, a record high so far this year. By the end of the year, the figure is expected to top 20,000 total.
Japan's inflation rate hit 2.8% this past August, the highest in roughly 31 years due to soaring prices of global food ingredient, oil and other items coupled with the yen's sharp depreciation. Some observers speculate that the inflation rate will reach 3% before long.
Rising inflation has taken a heavy toll on households, with each facing an estimated 70,000 yen (about $484) in higher food bills over the course of a year. With power and gas rates also jumping, low-income households are getting hit especially hard.
The government has drawn up a set of anti-inflation measures including a 50,000-yen (about $345) cash handout to low-income households exempted from residential taxes, and is set to hammer out a new economic stimulus package. Prime Minister Fumio Kishida has vowed to "make an all-out effort to address current price surges," and is set to work on easing the impact of spiraling electricity charges.
Some within the ruling parties have insisted that upwards of 30 trillion yen (approx. $207 billion) is necessary to counter spiking prices. Yet given Japan's cash-strapped finances, the government must steer clear of pork-barreling in the name of tackling the problem. Now is the time for the government to exercise wisdom to devise truly effective policy measures.
It is imperative to establish a safety net for Japan's needy. Assistance for food banks and "children's cafeteria" soup kitchens, which provide free meals to families with small children, should be expanded. It will also be effective to further tap the government's rice stockpile.
On the business front, it is essential to steadily raise wages to weather prolonged inflation. Major Japanese companies are generally enjoying strong earnings, though the situation varies among businesses. Firms that have seen their overseas earnings swell due to the falling yen should aggressively raise regular pay and bonuses.
To facilitate wage hikes among small- and mid-size firms, meticulous government support is indispensable. It is necessary to step up monitoring of major corporations to allow subcontractors to reflect rising costs in their delivery prices.
If pay hikes spur increased consumption, it will help improve corporate performances, leading to further pay rises. The government is called on to put together measures to kick this positive cycle into gear.