Firms in Japan raise wages by record amount in 2023
Organisations in Japan have elevated monthly average regular wages to unprecedented levels, marking a significant departure from the decades-long trend of stagnant incomes. The revelation comes from an annual government survey conducted by the Ministry of Health, Labour and Welfare, indicating a transformative shift in compensation practices within organisations in Japan.
According to the survey, monthly regular pay has surged by 3.2%, equivalent to 9,437 yen (US$63.59) on average for the current year. These figures represent record highs since the inception of comparative data collection in 1999. The survey, conducted between July 20 and August 10 with 1,901 respondents, illustrated an increase from last year’s 1.9% rise, amounting to 5,534 yen (US$37.55).
Policymakers emphasised the pivotal role of wage hikes in combating deflation and striving for a stable inflation rate of 2%. The survey results indicated that 89.1% of the polled organisations have already implemented or plan to implement average regular wage increases this year. This marks an uptick from the previous year’s figures of 85.7%, reaching the highest level since 2019.
An official from the Ministry of Health, Labour and Welfare highlighted the substantial impact of this percentage increase on the overall survey results. The wage surge, largely attributed to rising raw material costs that fuelled inflation pressures, has compelled major organisations to agree to average pay hikes of 3.58% – the highest increase in three decades, according to trade union group Rengo.
The corporate commitment to bolstering wages reflects not only an economic necessity but also a response to mounting labour and cost pressures. The survey results suggested that the momentum behind this year’s wage increases is poised to persist into the upcoming spring wage talks, according to early indications from organisations, unions, and economists, reported Reuters.