Hoping to jolt Japan's limp consumer spending, policymakers and business leaders are considering plans to let workers leave by 3 p.m. on the last Friday of each month to encourage them to shop, dine out and generally spend more.
Hoping to jolt Japan’s limp consumer spending, policymakers and business leaders are considering plans to let workers leave by 3 pm on the last Friday of each month to encourage them to shop, dine out and generally spend more.
Both the government and companies are currently discussing the proposed initiative, dubbed “Premium Fridays”, which, according to two people with knowledge of the proposal, could begin as early as February.
Retailers desperate for measures that could lift the consumption gloom say they’d welcome such a plan.
“We are hoping it will promote a change in lifestyle, with Friday becoming part of the weekend,” said Tetsuya Konnai, head of the Japan Department Stores Association.
“It could change consumers’ mindset.”
But in a country where long working hours are the norm, there are doubts about how willing companies would be to adopt the plan and whether it would actually stoke consumer spending.
Talk of the plan comes as the latest economic growth numbers showed persistent weakness in consumer spending. Overall growth in Japan in the July-September period grew by a faster-than-expected annualised 2.2 percent, lifted mostly by exports. Private consumption rose only 0.1 percent.
Past government efforts to jump-start consumption, such as tax breaks in 2009 on energy-efficient appliances, boosted consumer spending but did not drive sustainable growth. More recently, one-time payments to low-income seniors implemented this year failed to add significantly to spending.
“It will be meaningless if workers leave a few hours early on Friday but work longer hours on other days or on holidays,” said Toshihiro Nagahama, chief economist at Dai-ichi Life Research Institute.
In his efforts to revive Japan’s economy, Prime Minister Shinzo Abe is campaigning for more employee-friendly labour practices, including closing loopholes on overtime hour regulations.
Just over half of Japanese firms are reviewing rules on working hours with many looking to cut down on overtime, a recent Reuters poll found.
A spokeswoman at Isetan Mitsukoshi Holdings, a major department store chain, said the company had yet to formally adopt a Premium Friday policy, although two of the group’s stores in downtown Tokyo were preparing for it.
However, Mari Iwashita, chief market economist at SMBC Friend Securities in Tokyo, says the plan to get workers leaving work earlier on Friday does little to address deeper problems around Japanese consumer sentiment.
“Uncertainty about the future is the underlying cause,” she said. Japan’s economy has been stuck in the doldrums for more than two decades with wage growth anemic and consumer prices falling.
Changing prevailing practices in the Japanese workplace also presents formidable cultural challenges for both businesses and policymakers.
“I don’t think we’d spend more money – my husband can’t simply come home earlier because he’s got lots of people to deal with,” a woman shopping in central Tokyo, who asked not to be named, told Reuters on Monday. “Whatever the government says isn’t going to have any impact.”