Japan wage growth gathers steam as reluctant retailers raise pay

Major companies such as Fast Retailing (Uniqlo), Tokio Marine & Fire Insurance, Daiwa House Industry, Sumitomo Mitsui Banking Corporation, and Dai-ichi Life Insurance have increased starting salaries for new graduates to the 300,000 yen range.

The large companies seem to have more momentum, but it is unclear as no specific retail companies have been named.

They should release some of their accumulated internal reserves.

If the government also cut taxes, consumer sentiment would probably improve slightly.

Ishiba probably won't do it, though...

Real wage growth would be welcome to offset the zero or negative growth in inflation-adjusted real wages Japan has recorded for 33 of the last 35 months.

lol. So increase 50 yen an hour and the government takes 60% of it and then pay themselves on the back.

this focusses on %-ages but..... I suppose that's 7% (for example) of ¥1000 an hour (or less), so... on a 40-hour week for a "part-timer", Y2,800.... a little over 1万 a month. better than nothing but to judge from my foodbills and etc over the past year, that won't even keep up with "inflation".

stuck in a paradigm past its use-by date.

This is all about the Government that wants businesses to increase wages so that the Government can get more tax dollars.

When you get an increase, the Government increases taxes [again and again].

Start up your own business. That's when you make money. Not working for others.

“gathers steam”?!

What utter nonsense. ¥50 extra per hour?

Retail conglomerate Aeon is also considering raising hourly pay for the group's 420,000 part-timers by 7%, the same pace as last year.

.

70 yen extra an hour won’t even buy a soft drink from a vending machine.

Workers should be on 2000 yen an hour minimum!

I think I prefer the good old days of the yen at around 1:1 with the dollar, no inflation and low prices. Everything was affordable here in Japan for the past 30 years and lives were "good" enough.

The world changed after the re-opening up following Covid.

If the government also cut taxes, consumer sentiment would probably improve slightly. 

Ishiba probably won't do it, though...

His too busy worrying about when he can have his next smoke.

What's needed is not wage increases, but tax cuts.

""Japan's retailers, typically among the most tight-fisted of employers, are offering big pay increases for a second year in a row, meaning squeezed profits for companies, more spending money for workers, and a green light for more central bank rate hikes.""

They will just Raise prices to make up for the hikes, profits will always be first and # 1.

My relatives part time teens are making more / hour than a long term full time 6 days a week Japanese worker.

Math also has no mercy, 5, 6 or 7% more of almost nothing results again in almost nothing. lol

Overexaggerated title here: "Japan wage growth gathers steam as reluctant retailers raise pay"

More like a tiny lump of coal dumped on to a smoldering mass of nothing!

A new graduate getting paid in the 300,000 yen range really is working for peanuts.

I am pretty sure that that is what the starting salary of a university graduate was in North America 40 years ago.

And American get bonuses too.

This misrepresents the problem.

Staff are paid too little and an extra 5% of too little won't make much difference.

Owners see costs go up and increase prices, so salary increases lead to an inflationary spiral, not a virtuous circle. That extra cash workers get then vanishes in real terms.

Spooked by inflation and interest rate rises, people save rather than spend.

The real problem is that well paid people are paid far too much, and poorly paid people are paid far too little.

The wage pyramid needs to change. Nobody is worth the pay that CEOs and senior executives get. It is offensive, when ordinary workers are dedicating as much if not more of their lives to their employer for a pittance.

Companies MUST do more to increase productivity. Japan has be stuck with around 1% growth of labour productivity for 30 years; that is less than half the rate of growth in productivity in the US.

Innovate or go extinct.

So yes, 300,000 is a poverty rate that is based on productivity and is around the starting wage in the US 40 years ago.

Asiaman7 well said

Meanwhile in the real world. Factories can keep wages the same and bring in an immigrant. Convenience stores can do the same.

Government can get more tax dollars.

In Japan we do not use this currency.

300,000 was starting wage at NOVA in 2006, and that was part time and very dodgy and they would have given that job to a monkey as long as its first language was English. Its weird that there are people who are greatly more involved, in professional jobs with specialist qualifications and with significant experience who begin wages on much less than that.

Negative NancyToday  11:50 am JST

300,000 was starting wage at NOVA in 2006, and that was part time and very dodgy and they would have given that job to a monkey as long as its first language was English. Its weird that there are people who are greatly more involved, in professional jobs with specialist qualifications and with significant experience who begin wages on much less than that.

they got more because they weren’t enrolled in the Japanese pension system. They weren’t expected to stay either. Hours were also kept low to do some dodgy dodge that normal full times staff would get. Like bonuses, pension, etc it’s not like with like. Oh you could be fired at the drop of a hat.

I think I prefer the good old days of the yen at around 1:1 with the dollar, no inflation and low prices. Everything was affordable here in Japan for the past 30 years and lives were "good" enough.

The world changed after the re-opening up following Covid.

I agree on the timing. However, its also the Ukraine War and the attacks on shipping in the Gulf in response to Israel's attack on Gaza. The (inevitable) releasing of pent-up demand post-Covid has been turbocharged by untimely extra supply constraints on top of the supply constraints that Covid itself caused with factory closures, limited semconductor production etc. during lockdown.

Dollar strength vs. the yen is also mostly interest rates in the US. It matters to Japan because commodities are priced in dollars. Higher interest rates are screwing ordinary Americans who just want to house their families.

I don't know if there is a way back but yes, I would like to go back to those "good old days". Japan has tens of millions of retirees. The Japanese pension has not gone up with prices.

When they say they raise wages, how exactly does it work though? Do all the employees get an announcement that they will receive an incontrovertible raise or do they just give new hires and new grads the increase and claim they've accomplished wage increases? From what I'm hearing how much new grads are making these days, I feel like a lot of us other employees are being undervalued. Guess staying at one company for life is no longer beneficial in Japan. Just wish the job hunting process wasn't an absolute nightmare, otherwise I'd change jobs more frequently for a better wage.

toraToday  08:01 am JST

I think I prefer the good old days of the yen at around 1:1 with the dollar, no inflation and low prices. Everything was affordable here in Japan for the past 30 years and lives were "good" enough.

The world changed after the re-opening up following Covid.

Could not agree more. Life was more simple, stable, predictable, and less stressful.

The world changed after the re-opening up following Covid.

"Reopening" after covid is truly a recent thing, yet things here in Japan have been literally stagnant for over 2 decades.

Where have you been? Or are you just that young that you didnt have to live through the mess of the bubble bursting, that STILL haunts Japanese to this day!

I think I prefer the good old days of the yen at around 1:1 with the dollar, no inflation and low prices. Everything was affordable here in Japan for the past 30 years and lives were "good" enough.

Affordable enough for who? Over paid people who did nothing? The "average" Japanese struggled, and many struggle to this day still!

Supply and demand. Workers are needed to load the shelfs in the stores for the customers that can afford to buy. Grads are needed as new blood to drive(??) the industries forward. Expensive employees got to wise up, annual increases have been a thing of the past for at least a decade (well ... or be a civil servant!!)

they got more because they weren’t enrolled in the Japanese pension system.

Well that's not true. In 2005, I got more than that at NOVA, and I got them to sign me up for both the pension and health insurance. Stop making things up.

Forcing prices up and urging companies to increase salaries is just a trick to get more taxes.

BW, not just jpn see UghK, settle with rail, health employees, bin lorries etc with healthy rises then declare tax allowances frozen for years. L.HR.H, national debt. Not going to study how is jpn debt. I have been fortunate in securities, CGT ok. Are salaries taxes really 60%???

"wage growth" in present Japan is just "a drop in the bucket".

Tough life of most general citizen will continue unless changing politics that still abandon drastic inflation such as rice prices at store became twice comparing with half years before.