worker walks near a factory at the keihin industrial zone in kawasaki
Last updated on January 30th, 2024 at 05:38 am
In Japan, everyone is closely watching the spring pay negotiations, especially as the country works towards a healthy balance between wages and prices. This year, the focus is not just on big companies but also on smaller firms, which employ about 70% of Japan’s workforce.
Last year, due to high inflation, there was a significant increase in pay, reaching a 30-year high during the spring wage negotiations. A lot of companies increased pay to deal with the problem of prices going up. On average, affiliated unions saw a 3.58% pay raise, with larger companies leading the way.
This year, The main focus is on small firms to check if they can compete with last year’s figures. Tatsuhiko Nakanobu, an economist, expects strong efforts from these companies, given the pressure from larger firms setting the wage hike trend.
Despite the different challenges like rising costs, smaller companies are likely to make efforts to secure funds for wage increases. Nakanobu believes that the trend of large companies raising wages will push smaller firms to do the same. Some large companies, such as Suntory Holdings and Mitsui Fudosan, have already committed to substantial wage hikes.
polls indicate uncertainty. A recent joint poll showed that about 34.6% of small and midsize firms are not planning to raise wages, while 27.3% are. The rest are undecided. Some people see the wage hike and measure to attract workers in the face of labor shortages.
To solve these issues the Japanese government, under Prime Minister Fumio Kishida, is taking steps to support these smaller firms. A cross-ministry panel will be launched to assist struggling sectors in incorporating increased costs into their prices. The goal is to continue increasing salaries and steer Japan away from deflation.. At this important stage, the results of the spring wage talks will decide if the country can escape deflation and create a more balanced economy.