Organisations in Japan see biggest wage increase in three decades

Pay hikes in Japan are exceeding or meeting the initial target of a 5% increase set by organisations to address rising prices.
By: | May 23, 2024

In the spring wage negotiations, major organisations in Japan are offering their highest monthly wage increases in 32 years—exceeding 5%–in an effort to retain employment and combat rising prices.  

This comes from an initial tally of wage surveys according to the Japan Business Federation, or the Keidanren, the country’s biggest business lobby. Showing an average 5.58% rise, the wage increase is the highest since comparable data became available in 1992 and is equivalent to 19,480 yen (US$125) a month.  

This is the latest move by Prime Minister Fumio Kishida’s government, which has been increasing pressure on organisations to offer pay hikes and combat long-term deflation.

This year’s initial results are significantly higher than last year’s final tally, which showed a rise of 3.99%, or 13,362 yen (US$85.59). It was at the time the biggest increase in more than three decades. The final tally is expected to be released between late July and early August.

“The momentum of wage hikes has been growing since last year. We hope to ensure that this trend takes root,” an official at the business lobby said.

At many organisations, leaders met their unions’ demands in full due to the country facing a deepening cost-of-living crisis, coupled with an increasingly severe labour shortage. This includes organisations like Toyota Motor, which has offered its biggest pay hike since 1999, while others like Nippon Steel offered a bigger hike than expected.

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The overall results found by the Keidanren are aligned with a separate survey conducted by the Japanese Trade Union Confederation, the country’s biggest labour union, reported Kyodo News.

According to its most recent tally, the average pay hike of the Japanese Trade Union Confederation member unions stands at 5.17%, surpassing the original goal of 5% or above that the organisation set this year for spring wage negotiations.