Trade Regulations and Legal Considerations
Undeniably, the government has a direct influence on businesses mainly through policies and regulations. As such, companies must consider these policies in their decision-making processes. While most laws are enacted to create a conducive business environment, some policies may lower the profitability and growth of a company. Government regulations affecting firms include the minimum wage, maternity leave, sales tax, and subsidies.
Firstly, setting the minimum wage is a common way through which governments influence businesses. In Japan, the minimum wage varies depending on the region. The least salary in all areas is ¥790 per hour. Employees are supposed to work for 40 hours every week (“Minimum Wage – Japan”). Indeed, this technique helps avoid the abuse of workers.
Secondly, the government influences businesses by setting the duration of paid maternity leave. Before giving birth, one can take a six-week leave, and an eight-week leave after birth (“Maternity Leave And Child-Raising Leave in Japan”). Thirdly, Japan’s sales tax is 10% (“Japan Delivers Long-Delayed Consumption Tax Hike”). Even though nearly all goods and services are affected, the government has exempted most foods. Lastly, government subsidies form a core feature of Japan’s economy. Subsidy Program for Projects Promoting Asian Site Location covers expenses like survey design, as well as facility and equipment rental (“Tax Incentives & Subsidies”). Notably, this approach has helped attract foreign investors.
The regulations mentioned above play a pivotal role in controlling the business environment. Having a minimum wage helps establish a living standard that protects the well-being and health of workers. Paid maternity leave protects women from being exploited, as they are often sleep-deprived by their babies. Imposing sales tax acts as a primary source of government revenue, which is, in turn, used to improve infrastructure, education, and public services. Subsidies increase the supply of a specific product, through reduced cost of manufacturing.
In summary, governments have a significant impact on businesses through various policies. Typical regulations include the minimum wage, maternity leave, sales tax, and subsidies. These regulations help protect workers, generate revenue, and increase the supply of particular products.
Works Cited
“Minimum Wage – Japan”. WageIndicator, 2020, wageindicator.org/salary/minimum- wage/japan.
“Maternity Leave and Child-Raising Leave in Japan”. General Union, www.generalunion.org/laws-and-rights/1213-maternity-leave-and-child-raising-leave-in- japan.
“Japan Delivers Long-Delayed Consumption Tax Hike”. BBC News, 2019, www.bbc.com/news/business-49849484.
“Tax Incentives & Subsidies”. EU-Japan Centre, www.eu-japan.eu/taxes-accounting/tax- incentives-subsidies.