Business

What would be your reaction if employer says wage hikes for workers should be above inflation?

Published

4 months ago

January 17, 2024

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What would be your reaction if employer says wage hikes for workers should be above inflation?

Have you ever talked to your employer about wage hike? What do you expect him to say? If you did, then what was the response? Mostly, the answer is like your demand is too high, we don’t the resources, the business can’t afford it, the costs are rising.

The chances are you may get a much less pay raise if you persist and there is no replacement. In case of being indispensable for and directly linked to the profits, you will get what you want. But such cases are very far and few.

In pay raise talks at individual or group level, inflation is always the standard, as workers want to at least cover their expenditures. However, the real wages are on a decline in most of the countries around the world for an average worker.

But would be your reaction if an employer says the workers should get more than the inflation rate? You must be over the moon and dancing.

JAPAN WAGE HIKES

Actually, it has happened in a faraway land called Japan where the head of the country’s biggest business lobby Keidanren, according to Reuters, on Tuesday suggested pay raise this year that exceed the inflation rate, setting the tone for annual wage talks that may pave the way for the Bank of Japan (BOJ) to exit its ultra-loose monetary policy.

At stake in this year’s spring negotiations between trade unions and large Japanese firms, analysts say, is whether wages will rise far enough to ignite the sustainable inflation that policymakers consider a prerequisite for ending negative interest rates.

The talks are due to conclude in mid-March.

“Our main scenario is for the BOJ to confirm wage hikes at big firms and go ahead with ditching negative rates in April,” said Hideo Kumano, executive chief economist at Dai-ichi Life Research Institute.

In an annual report on Keidanren’s management and labour policy, released on Tuesday, Chairman Masakazu Tokura said the business lobby and companies this year bear “[corporate] social responsibility to aim for wage hikes that beat price rises”.

“There’s a very strong sense of urgency that Japan’s future rests on whether we can step up a gear to achieve structural wage hikes this year and onwards,” Tokura said, adding that present conditions offer a “last chance” to end deflation completely.

The report, which serves as the basis for the lobby membership’s stance in annual talks with Rengo, Japan’s largest labour union group, also said the government and the BOJ are expected to guide policies aimed at achieving “appropriate price hikes”.

Small firms, which employ seven out of 10 employees in Japan and have a greater impact on overall wage growth, tend to begin labour-management talks after big firms wrap up their negotiations in March.

Several large firms have already said they intend to implement big wage hikes, although plans at small companies will only be known around mid-year.

While small firms tend to operate on thin margins, many also face a labour crunch, due largely to Japan’s ageing population, and have no choice but to raise wages to attract talent, analysts said.

Prime Minister Fumio Kishida, BOJ Governor Kazuo Ueda, Keidanren chief Tokura and Rengo head Tomoko Yoshino are all seeking pay raises that beat inflation, after last year’s labour talks brought pay rises of nearly 3.6 per cent, the highest in three decades.

The tighter job market, record corporate earnings and ample cash holdings at many Japanese companies have added to the case for firms to share more of their profits with workers.

Japan’s jobless rate stood at 2.5pc in November, edging close to levels not seen since Japan’s asset bubble burst in the early 1990s. November data from the Labour Ministry also showed that there were nearly 1.3 jobs for every job seeker.

While companies were hoarding 343 trillion yen ($2.4 trillion) in cash and savings as of the end of September, the ratio of wages to profits remained relatively low, analysts said, leaving room for higher labour costs.

Tuesday’s Keidanren report will be followed by a labour and management forum next week, which will kick off the wage talks in earnest.

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Business

Chinese firm aims to expand investments in Pakistan, shows interest in mining sector

Published

1 day ago

May 17, 2024

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Chinese firm aims to expand investments in Pakistan, shows interest in mining sector

A notable Chinese company has expressed keen interest in expanding its investment in Pakistan, in yet another sign of investor confidence boost in the leadership of Prime Minister Shehbaz Sharif.

A delegation from Chinese firm MCC Tongsin Resources led by its Chairman Wang Jaichen called on PM Shehbaz here on Friday.

The premier invited the Chinese company to invest in Pakistan’s mining sector and manufacturing of export goods.

Shehbaz assured the delegation that his government would extend all-out facilitation to the company from minerals exploration and processing to the export of goods.

The PM instructed the relevant federal ministers and officers to continue consultation with the Chinese firm, taking the Balochistan chief minister, provincial departments and stakeholders on board.

The delegates reposed trust in PM Shehbaz’s leadership, and expressed keen interest in enhancing their investment in Pakistan’s mining and minerals sectors.

The delegation briefed Prime Minister Shehbaz about the construction of a mineral park in Pakistan and their future investment plans.

The premier welcomed the Chinese firm and highlighted the priority steps by his government to promote foreign investment in Pakistan.

He said that being a time-tested friend, China supported Pakistan in every difficult hour for which the Pakistani nation was grateful to the leadership and people of China.

Federal ministers Ahad Khan Cheema, Dr Musaddik Malik, Rana Tanveer Hussain, Jam Kamal Khan and relevant senior officers attended the meeting.

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Business

Govt jacks up power price by Rs1.47 per unit

Published

1 day ago

May 17, 2024

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Govt jacks up power price by Rs1.47 per unit

The government on Friday increased the electricity tariff by Rs1.47 per unit.

According to Nepra sources, the collection from consumers will take place in August, September, and October.

The electricity companies had requested the funds as part of the third quarter adjustment for 2023-2024, seeking Rs 31.34 billion under capacity charges.

Sources said that Rs5.57 billion were requested for operation and maintenance costs, and Rs12.38 billion were requested for the transmission and distribution impact under monthly fuel cost adjustment.

Previously, Nepra had completed the hearing on the electricity companies’ request under the quarterly adjustment.

Nepra approved the Power Division’s request, allowing an increase of Rs 1.45 per unit in electricity prices.

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Business

Hong Kong allows China’s digital yuan to be used in local shops

Published

1 day ago

May 17, 2024

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Hong Kong allows China's digital yuan to be used in local shops

Hong Kong will allow mainland China’s pilot digital currency to be used in shops in the city, the head of its de facto central bank said on Friday, marking a step forward for Beijing’s efforts to internationalise the yuan amid rising geopolitical tensions.

The programme, backed by Beijing, will allow mainland Chinese and Hong Kong residents to open digital yuan wallets via a mobile app developed by China’s central bank and will permit them to make payments in retail shops and some online stores in Hong Kong and in mainland China.

Transactions using e-CNY, predominantly for domestic retail payments in China, hit 1.8 trillion yuan ($249.27 billion) as of end of June 2023, with 120 million digital wallets opened, according to the latest disclosure from China’s central bank.

Using the wallet, users can make payments at over 10 million merchants in 17 provinces and cities in the mainland.

Each wallet used in the city will be subject to a balance limit of 10,000 yuan, with single transactions and daily payments capped at 2,000 yuan and 5,000 yuan, respectively, officials from the Hong Kong Monetary Authority said.

Peer-to-peer transfers will not be allowed at the moment, according to the HKMA.

“By expanding the e-CNY pilot in Hong Kong .. users may now top up their wallets anytime, anywhere without having to open a mainland bank account, thereby facilitating merchant payments in the mainland by Hong Kong residents,” HKMA Chief Eddie Yue said.

Currently, users of other digital yuan wallets such as those operated by Ant Group and Tencent can make payments in the city.

Industrial and Commercial Bank of China, Bank of China Ltd, China Construction Bank Corp and Bank of Communications Co have been selected as e-CNY wallet operators.

The yuan’s use in global finance remains low, though it has shown steady increases.

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