SMEs in Japan plan to offer higher wages

More organisations in Japan intend to raise wages to keep pace with inflation, including those that had previously done so.
By: | January 30, 2023

In response to the government’s calls for pay increases to counter inflation, around a third of small- to mid-sized organisations in Japan plan to raise wages, a survey by Daido Life Insurance has revealed.

The survey, which garnered responses from more than 9,000 executives at small- and mid-sized organisations across Japan, found that 34% of respondents were willing to offer wage hikes, including those organisations that had already raised wages. Among these organisations, 24.9% indicated that they would increase wages by less than 2%, while 27.8% plan to increase wages by 2-3%.

32% of the organisations surveyed, however, stated that they have no intention to offer pay raises, citing uncertainty about the economic outlook and sluggish earnings.

READ: Firms in Japan expected to offer largest wage increment in 26 years

As part of the government’s campaign for higher wages, Japanese Prime Minister Fumio Kishida has called for pay hikes to keep pace with inflation. Furthermore, government data showed the nationwide core consumer price index rose by 4% from a year ago in December, which marked the highest pace since 1981, reported Kyodo News.

Small and mid-sized organisations constitute more than 99% of all organisations in Japan, hence, pay increases at these organisations are essential to preventing consumer spending from slowing down.