Prime Minister Shinzo Abe is urging business leaders to raise wages, saying it could help stimulate domestic demand and beat chronic deflation.
"We'll ask for the cooperation of companies whose performance is improving" in a bid to boost national income through wage increases, Abe said during a meeting Tuesday of the Council on Economic and Fiscal Policy, the government's key economic panel.
It is rare for a prime minister to directly put pressure on business circles to raise wages. Pay is usually determined through negotiations between management and labor.
Akira Amari, economic and fiscal policy minister, said at a news conference after the meeting that the government has also started to consider effective measures to promote business spending and to bolster employment of women, as well as young and elderly people.
Four private-sector members of the panel, meanwhile, called for a new framework with the public sector to increase employment and income, Amari said.
The results of the discussion will be incorporated into medium- to long-term economic and fiscal policy blueprints, scheduled to be crafted in June, officials said.
Abe's government, formed Dec. 26, has pledged to take all steps necessary to terminate the vicious cycle in which price declines drag down corporate profits, making companies reluctant to beef up investment, hire more employees or raise wages for workers.