Tight jobs market in Japan keeps upward pressure on wages
Japan’s labour market showed further signs of tightening in October, signalling an upward pressure on wages.
In October, the job-to-applicants ratio climbed to 1.35, which meant there were 135 jobs offered for every 100 applicants, marking a slight increase from 134 positions a month earlier.
“The labour market is certainly tightening, but if you look at the details, you see many openings in the service sector whose pay scale is low,” said economist Takeshi Minami at Norinchukin Research Institute.
“In that sector, wage growth will be big in terms of percentage figures, but to get a 3% raise in the entire labour market, you’d need nearly a 5% raise in the spring wage negotiations including regular pay hikes,” Minami added, reported Bloomberg.
The government is already making efforts to push up wages. Last month, Prime Minister Fumio Kishida announced a 71.6 trillion yen (US$518.7 billion) economic stimulus package, which includes incentives for businesses to increase wages and help support the economy, on top of anti-inflationary measures.
Keidanren, the country’s top business lobby, has also called on member companies to raise the wages of their employees to offset rising prices.