The Kobe Steel scandal rapidly going global offers insights into why more Japanese households aren’t feeling the benefits of today’s 2.5 percent growth.

The Nikkei is going gangbusters, something Prime Minister Shinzo Abe is highlighting as proof Abenomics is succeeding ahead of Sunday’s general election. But for whom? Real wages rose just 0.1 percent in August following a 1.1 percent drop in July. With the economy enjoying its longest expansion in 11 years, labor markets drum tight and companies awash in profits, incomes should be surging. Such mismatches will happen when a revival scheme is 90 percent monetary easing and, at best, 10 percent structural change.

Most of those tweaks since December 2012 relate to corporate governance. Abe championed a U.K.-like stewardship code to encourage shareholders to speak out and prod companies to hire more outside directors. But these largely voluntary and unoriginal guidelines are no match for Japan Inc., something of which Kobe Steel Ltd. reminds us anew.

The 112-year-old company sold dodgy products to at least 500 others by falsifying data. It’s bad enough that the Boeing Co.’s and Ford Motor Co.’s of the world are doing damage control. This scandal directly taints two growth industries on which Abe is relying to create jobs: Shinkansen trains and nuclear technology. Overseas purchasers of Japan’s bullet trains and nuclear reactor hardware now face their own crises.

To whom much is given, as the old saying goes, much is expected. Abe’s Liberal Democratic Party has rarely asked much in return for the corporate welfare it’s doled out for decades. That’s why a who’s-who of corporate icons are producing embarrassing scandals: Nissan Motor Co., Olympus Corp., Sharp Corp., Takata Corp., Tokyo Electric Power Co., Toshiba Corp. and Toyo Tire & Rubber Co.

This orgy of corporate controversy belies the hype about Abenomics ushering Japan Inc. into the 21st century. Just as it takes a village to raise a child, it takes a certain political establishment to create a Kobe Steel. Abenomics hasn’t demanded enough of corporate Japan. What else can be concluded by the ruling coalition giving chieftains a pass on their huge cash reserve hoards?

It’s an eminently wise idea, one championed by Yuriko Koike’s Kibo no To (Party of Hope). If only corporate giants would share their $2.7 trillion-plus of cash, consumer spending might be surging and generating 2 percent inflation. Those profits owe much to Abe’s weak yen policies and the Bank of Japan cornering parts of the Nikkei. Failure to share that wealth is as much about selfishness as a lack of confidence in the future.

Yes, Abe needs to boost sentiment. But his LDP also must stop treating Japan Inc. with kid gloves. Until lawmakers do, institutional rot will continue damaging the Japan brand in drip, drip, drip fashion and make the 2 percent inflation goal more and more elusive.

After Olympus’ $1.7 billion accounting scandal in 2011, we saw the typical corporate kabuki theater: chastened executives bowing before cameras, feigning remorse and asking for forgiveness before returning to business as usual. The same was true of Tepco that same year and Takata two years later. How is it possible that, four years into a deadly airbag scandal, Takata Chief Executive Officer Shigehisa Takada still has a job?

It’s time lawmakers sought some reciprocity from the ungrateful chieftains they’ve long coddled. Koike’s excessive-cash levy is an obvious first step, especially considering that as many as 70 percent of companies pay little or no tax. Holding companies that are getting rich off Abenomics to account would make it more about a much larger portion of the population, not just those with sizable stock and real-estate holdings.

Or, Abe could go the other way: tax incentives to companies that share a certain ratio of profits with workers. Tokyo might consider taxing banks hoarding government bonds rather than lending.

Next, Abe should tackle the “iron triangle” of incestuous ties between elected officials, bureaucrats and chief executive officers. Tokyo should increase investigative and enforcement efforts, apply stiffer punishments for malfeasance and use the bully pulpit to name and shame wayward executives. Let’s set up a corporate responsibility board to police executives independent of ministries too close to exercise impartiality.

The Kobe Steel debacle is only just beginning. Those 500 aggrieved clients are sure to have lots of company in weeks ahead. Expect a tsunami of litigation as automakers, aircraft manufacturers, defense contractors and others using the company’s aluminum, copper, wiring and piping assess exposure. For some items, admits Kobe Steel executive Naoto Umehara, fudged data dates back some 10 years. That’s a recipe for lots more bad headlines for Japan Inc. Perhaps even U.S. Congressional hearings of the kind that ensnared Takata and Toyota Motor Corp. in recent years.

Five years into Abenomics, Japan Inc. still answers to no one. It’s time Tokyo demanded not just greater accountability, but also commitments to share those benefits with the rest of the population.

Tokyo-based journalist William Pesek is the author of “Japanization: What the World Can Learn from Japan’s Lost Decades.”

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