business

Companies offer smaller pay increases amid sputtering economy

34 Comments
By Tetsushi Kajimoto and Yoshiyasu Shida

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34 Comments
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Right, a 2% increase in wages, and a 2 yen increase in the consumption tax, how ironic!

Plus minus zero really, considering as well that costs across the board have been increasing as well, this 2% increase is a kick in the nuts!

Death by 1000 paper cuts!

4 ( +4 / -0 )

What a load of self-indulgent piffle! Over 60% of the workforce are on short-term contracts with yearly evaluations and NO salary increases what-so-ever! However, you can be sure the executives get their salary increases at the expense of the other 90% of the workforce.

10 ( +10 / -0 )

At this year's shunto, both companies and unions don't seem to put greater emphasis on wage hikes than before," said Kiichi Murashima, economist at Citigroup Global Markets Japan.

"Instead, they are considering a wider range of issues like pay disparity, labour productivity and work-life balance."

Dont put any emphasis on wage hikes but "consider issues like pay disparity"?!?!?!?!

What a bunch of hogwash! Haven't they figured out that the disparity in pay is due to a LACK of wage hikes for the worker-bees and an increase in pay for those who sit on their butts all day sucking their teeth!

6 ( +6 / -0 )

Id wager one of the reasons there's no increases is because companies aren't actually making that much money. To keep the ship afloat, feigned acts such as these are done. Got to keep the foreign investors happy amarite???

0 ( +0 / -0 )

"Disillusioned" summed it all up!

As did "Yubaru"!

No pay increase at all, besides that an increase of the consumption tax, lots of stuff got more expensive already (cheese, noodle products, etc), so in the end, salaries are decreasing.

But "those" at the top of the pyramid got it made, as always.

2 ( +2 / -0 )

Why so glum? This is a victory for the "reform" movement. Under Japan's burgeoning free-market, neo-liberal economic model, companies must minimize labor costs so as to maximize profits. That means no or very little scope for wage raises, I'm afraid.

All you JT posters who have spent the last few years lauding "market reforms" should be applauding, not griping...that everyone except rich people are earning less real income.

-2 ( +1 / -3 )

Id wager one of the reasons there's no increases is because companies aren't actually making that much money.

Hahaha, that's a joke right? I'm 150000% sure that the top of the companies get nice bonuses on top of their already fat paychecks.

4 ( +4 / -0 )

Japanese Government agencies no wage increase. Not leading by example.

Meanwhile; https://www.reuters.com/article/us-japan-economy-wages-error/japan-wage-data-credibility-in-doubt-over-erroneous-sampling-idUSKCN1P30M7

0 ( +0 / -0 )

Abenomics at its finest. Slaves just aren't educated enough to know better. Abenomics at its finest.

2 ( +3 / -1 )

The rich get richer and the poor get poorer-same as it has always been....

3 ( +3 / -0 )

But...but...Abe-san urged 5% only last December. He URGED it!

https://www.japantimes.co.jp/news/2018/12/26/business/abe-urges-wage-increase-japans-workforce-effort-spur-consumption-tax-hike/#.XIhW_igzaHs

Surely he's not just spouting hot air, lining the pockets of the big boys, and a waste of time for everybody else?

4 ( +4 / -0 )

I have been hearing this for the last 20 years about the Japanese economy sputtering..............I guess the country is about ready to fall off a cliff with all the doom and gloom just before spring. Meanwhile I have never seen so much construction in Central Tokyo in my life. Somebody's doing well and it isn't the hard working salary men trying to make ends meet.

4 ( +4 / -0 )

DisillusionedToday 07:17 am JST

What a load of self-indulgent piffle! Over 60% of the workforce are on short-term contracts with yearly evaluations and NO salary increases what-so-ever! However, you can be sure the executives get their salary increases at the expense of the other 90% of the workforce.

That's the nature of things. The lion gets to be on top of the Food chain

-2 ( +0 / -2 )

When I was a Japanese salaried man, yearly base pay increase was very small - several thousand yen and I  was disappointed. But that was the price we had to pay under the lifetime employment.  At the American company I worked later they paid good money when the company made profit but they dismissed employees easily when the business did not go well. They said the company reduce the manpower since the company does not have money to pay to you. I do not know which system is better.

0 ( +1 / -1 )

Schopenhauer - When I was a Japanese salaried man, yearly base pay increase was very small - several thousand yen and I was disappointed. But that was the price we had to pay under the lifetime employment. At the American company I worked later they paid good money when the company made profit but they dismissed employees easily when the business did not go well. They said the company reduce the manpower since the company does not have money to pay to you. I do not know which system is better.

You are comparing your your experience with one US company with the whole business culture of Japan? The vast majority of overseas companies take care of their workers. This is in total contrast to the way Japanese employers enslave their workers, make them work copious amounts of overtime and constantly threaten them with being fired if they do not comply. Foreign companies also encourage their workers to take annual leave and pay for the days that are not taken. Quite different, don’t you think?

This article is just a bag of hot air.

4 ( +4 / -0 )

More surprising thin I experienced at an American company was that a person arriving to the company in Tokyo from the States took his annual leaves before arriving the company.

-1 ( +0 / -1 )

Abenomics at its finest. 

Abe isn't deciding people's wages. Private-sector bosses are. Why does no one blame the people who are really responsible?

They've been making the highest profits in human history, yet they say they cant "afford" to give wage rises reflecting their massive earnings. If you cant identify the greed and unfairness in all that, you've let the corporate interests brainwash you.

1 ( +2 / -1 )

I’m curious. What’s smaller than 0? Are you saying they will now reduce your salary every year? Japan’s largest companies hold more than $900B in cash. Many Japanese companies are seeing record profits. However, employees logged negative pay increases during the last 2 years.

3 ( +3 / -0 )

It's actually funny, I and my wife originally were salery serfs. Now we have our own company and employ family. So as a bubble we are so better off. You can follow the government line or use the government line to your and family's benifit. Why the hell would I want a minion of the government to have pretend meeting that results in a pay decrease at best. Salerys are not based on out put in Japan rather on who has the shiniest car.

0 ( +0 / -0 )

@Schopenhauer

When we transfer from one country to another country, within the same company, we will lose any unused benefits as our benefits will reset. An example was when I was being sent to Canada for a year to oversee a project. I still had 22 vacation days and 6 sick days that I didn’t use.

My company doesn’t pay out sick days and vacation days. Typically they get carried over to the next year; however, because I was going to a new country where things were different, I would lose my benefits so I had to use them.

1 ( +1 / -0 )

Was watching the tv yesterday and they were talking about how many people in their 30's and 40's have no savings. The main culprit they said was that there was no overtime. But I think it is a pretty sad state when workers need overtime just to make enough money to live. Pay the people a decent wage, stop hording the money and give it back to those who have earned it for you.

Jeff Lee I disagree, if the Abe gov't raised the mininum wage, then companies would be forced to up their salaries or lose people. But he will never do it. Canada upped its wages and I don't hear gloom and doom, there!

2 ( +2 / -0 )

I figure I repeatedly see in the press is 40% of the Japanese workforce is irregular. Someone have a link reporting 60%?

Abe isn't deciding people's wages. Private-sector bosses are. Why does no one blame the people who are really responsible?

They've been making the highest profits in human history, yet they say they cant "afford" to give wage rises reflecting their massive earnings. If you cant identify the greed and unfairness in all that, you've let the corporate interests brainwash you.

I have no love for our benevolent corporate daimyo, but I find this a bit disingenuous. When Abe took power the corporate tax rate was 38%. Isn't it now 29 or so? His government also is on the record as saying this tax cut would would lead to wage growth. But as we continue to see, profits are sitting company coffers or they've been issued to shareholders. Saying he has no leverage simply isn't true. Instead of his semi-annual toothless pleas, ad nauseum at this point, maybe he could threaten corporate leaders to raise wages or face pre-2012 tax rates.

Of course, I'd add that our pampered LDP patricians don't really give a rat's arse if wages rise or not. Such language is for public consumption. They have donations to line up, their own coffers to fill.

3 ( +4 / -1 )

Was watching the tv yesterday and they were talking about how many people in their 30's and 40's have no savings. The main culprit they said was that there was no overtime.

It's always been all-you-can-overtime in Japan. The only problem is that it's not paid.

The people get what they deserve...

1 ( +1 / -0 )

I disagree, if the Abe gov't raised the mininum wage,

So what should he raise the minimum wage to? You probably dont know this because of your comment here, the minimum wage in Japan varies according to region.

Let's say you raise the minimum wage to even ¥1,500 per hour, not unreasonable right? All of a sudden you have pt and hourly wage workers making more money than full-time salaried employees in many areas of Japan.

In Tokyo on the other hand, that would hardly be enough to live on!

So what's Abe going to do? Make a law that forces businesses to pay higher wages than salaried employees, or are you going to counter by saying that businesses in the most depressed areas of the economy have to raise their employees wages above that of pt and hourly workers?

You are suggesting chaos!

-1 ( +0 / -1 )

I disagree, if the Abe gov't raised the mininum wage,

Continuing here; let's say he "raises" the minimum wage in Tokyo to ¥2,000 per hour. THEN what happens is people from regions from outside Tokyo will flock in even greater numbers to Tokyo to find jobs, and it will pressure more business in Tokyo to raise wages even higher to compete for workers.

The escalation would be unstoppable.

Hence the need for businesses and corporations to lead the way with wage increases, if their employees get higher wages, and the workers see a stable economy they WILL spend more. Consumer spending traditionally fuels a growing economy as the need and want and more importantly spending on and for higher priced durable goods increases in relationship to the stability and continuing wage increases.

Hence the need as well for unions to get stronger here and quit with the tradition of sleeping in bed with the management of the workers who they represent!

Japanese unions need to force a general strike that literally paralyzes the company or economy as a whole.

(And then I woke up!)

1 ( +1 / -0 )

Working style is changing in Japan. They do not stick to the same company than before. When I was at an American company, an American worker said to me after hearing that I was engaged in the same job for many years. "It gets stale."  On the other hand I thought it may be difficult for Americans to have a long term life planning in the society of "hire and fire."

0 ( +0 / -0 )

This is the saddening reality, especially for our younger generation.. and Abe wants to increase the tax to 10%GST in September, this will destroy our economy further, plus cheaper imports from other countries.

2 ( +2 / -0 )

Thank you Yubaru, I am highly aware that the minimum wage is set by each prefecture, and the prefecture I live in has the lowest, thank you very much. I still think the Abe gov't could pressure each prefecture to raise the wages to a level that is fair to all. Right now it is hovering at Y738, which is pretty damn hard to live on.

And yes, the specter of higher corporate tax might work, but something has to be done to help these people. If not by companies then by the gov't that is supposed to working for them, not against them.

3 ( +3 / -0 )

In Tokyo and (to a slightly lesser extent) Osaka and a few other metropolis, the economy is doing just fine.  Lots of construction and plenty of bling on show.  But certainly at the lower end of the pay scale and for lots of youngsters the picture not so rosy.  as for the inaka, not si great.  Huge government subsidies are the only things that keep the countryside viable at all, and then almost only for farmers.

The government just borrowing and misallocating resources to benefit the rich and benefit the entrenched privileges of some industries and the farmers lobby.

0 ( +0 / -0 )

Construction is that of mega companies or investors and most to cash in on the short term olympic construction spike, not the average worker in Japan, a population of 130 million, it is like comparing apples and bannanas in economics.. Learn more economics..

0 ( +0 / -0 )

Most consturction also is that of being built on the same land or expanded land, earthquake regulations are very high here, so owners of those commercial buildings tend to want to/can or perfer to rebuild on the same land to take down 80s or 90s era buildings (or older) due to the foundation in the buildings being affected from numerous quakes every year..

0 ( +0 / -0 )

@jcapan

I find this a bit disingenuous.  

I find it odd that that no one (except me) ever blames the decision-makers for their decisions, and spare ALL their indignation on an enabler. Abe's culpability lies in his naivety and underestimation of the power of corporate greed, mitigated somewhat by his repeated public calls for profit-rich corporations to raise wages and equalize their workforce structures.

0 ( +0 / -0 )

China is a burden to Japan's economy, cheap goods no one can compete with, fake devaluation of their currency, dodgy business practices, our factories are closing one by one

0 ( +0 / -0 )

I am highly aware that the minimum wage is set by each prefecture, and the prefecture I live in has the lowest, thank you very much. I still think the Abe gov't could pressure each prefecture to raise the wages to a level that is fair to all. Right now it is hovering at Y738, 

SO you live in Okinawa., Yet even here, due to the lack of workers in service related jobs, there are very few that actually take a job at that level of pay, unless they are in HS or dont have ANY skills that are needed in the market.

0 ( +0 / -0 )

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