Japan’s top firms agree to minimum wage raise of over 2%

Top businesses in Japan have agreed to raising the minimum wage by over 2% at the country’s annual wage talks. 

The increase marked a raise from the previous year, but still fell short of Prime Minister Fumio Kishida’s request for a bigger increase to spur economic growth.  The prime minister had previously called for a wider distribution of wealth, and urged companies to increase wages of their workers by 3% or more.

Economists expect that the average wage increase for big companies is likely to be north of 2%, an increase from last year’s eight-year low of 1.86%.

“Today’s outcome was a little stronger than expected,” said Hisashi Yamada, senior economist at Japan Research Institute, according to Reuters. “Still, the pace of gains turned out to be moderate and it was not strong enough to boost the overall economy.”

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The overall increase should be around 2 to 2.5%, Yamada said. So far, companies like Hitachi Ltd and Toshiba Corp have agreed with their unions to raise overall wages by 2.6% and 2.5%, respectively.