High-rise office buildings are seen in the Shinjuku business district of Tokyo during sunset. Photo: REUTERS file
business

Japanese companies offer lowest pay rises in 8 years as pandemic bites

24 Comments
By Tetsushi Kajimoto

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...the COVID-19 pandemic is putting an end to the benefits brought on by former premier Shinzo Abe's stimulus policies.

What benefits? Workers didn't see any.

16 ( +16 / -0 )

But this is fine because in Japan no one will ever go against anything so a low wage is just as acceptable as a rainbow in Hawaii. Everything is going to be OK.

12 ( +12 / -0 )

"...because people working from home aren't really working", says Keidanren.

16 ( +16 / -0 )

At least they are getting raises, unlike many foreigners here.

4 ( +8 / -4 )

Companies saw their profits rise in the last eight years, (and tax reduction) stock market made record gains. something is seriously wrong with how people are paid. And I bet politicians and bureaucrats get a pay rise. As pol pot said freedom is the absence of choice.

7 ( +8 / -1 )

More of them are adopting merit-based wages, rather than seniority-oriented pay, to lure young talent.

Are you sure this piece is not from the "Our columns from 50 years ago" section?

6 ( +6 / -0 )

Japanese companies are offering the lowest wage increases in eight years as labor talks wrap up on Wednesday, in a sign the COVID-19 pandemic is putting an end to the benefits brought on by former premier Shinzo Abe's stimulus policies.

Over the past seven years, major firms have offered pay rises of 2% or more in annual shunto spring wage negotiations, in a nod to government efforts to eradicate two decades of grinding deflation. Abe's policies, dubbed "Abenomics", targeted wages among other reforms to help reflate the economy.

I wonder what alternate Japan this article is emanating from.

So we have:

Abe's pandemic stimulus brought benefits to wages that only ended recently.

Abenomics targeted wage growth beyond his periodic "urges" to Japan Inc.

The pandemic economic downturn is the reason wage growth is stalled.

All of which are patently wrong and untrue.

Bravo effort at spinning the narrative though.

5 ( +6 / -1 )

Good news. One day I am looking for an opportunity to work a super market and be able to pay my bills and send my kids to college one of these days as I of am burning out from office working in cubicles.

2 ( +4 / -2 )

Some firms are shifting away from across-the-board wage hikes toward a more varied approach on remuneration. More of them are adopting merit-based wages, rather than seniority-oriented pay, to lure young talent

If that was 1% true most their current management would be homeless so no.

The old boys need cash for kyabakura this weekend, merit based approach is impossible in JP unless culture changes and probably, all prostitution venues are closed. The they wouldn't need so much cash.

12 ( +12 / -0 )

"Many companies are relying on government subsidies to retain jobs amid slumping profits. If the situation lasts longer, more and more firms could lay off workers," said Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute. "In recent years unions had a clear advantage over companies as they faced a labor crunch. The pandemic has changed all that."

> One more howler. Contradicted by other articles showing subsidy receiving firms, namely JTB, radically slashing employment and engaging in stock buyback and tax avoidance schemes instead of retaining workers.

The economic reportage of Japan Inc. is more propagandistic than the CCP's.

6 ( +7 / -1 )

I got a substantial pay raise this year! My retirement was increased ¥150,000.00 a month! Not bad not even being age 40!

-6 ( +3 / -9 )

Over the past seven years, major firms have offered pay rises of 2% or more in annual shunto spring wage negotiations, in a nod to government efforts to eradicate two decades of grinding deflation.

So then, did the 2% inflation target get met, after those 7 years of 2% wage hikes?

I’m going to guess no one thinks the inflation target has been met. But government keeps meddling in prices nonetheless...

2 ( +2 / -0 )

How about we work for no pay, and in return the government gives each family rice, noodles, cooking oil, fish and vegetables? Electricity, gas and water free.

-3 ( +1 / -4 )

My retirement was increased

I'm not sure what you mean by this, but unless you're getting cold hard cash in your bank account each month, I wouldn't be so sure that you will ever see that money...

7 ( +7 / -0 )

@Fuzzy, Ricky didn't see the - sign which indicates a decrease in his retirement!

My retirement was increased

I'm not sure what you mean by this, but unless you're getting cold hard cash in your bank account each month, I wouldn't be so sure that you will ever see that money...

1 ( +2 / -1 )

Uhm, sorry......what pay rise?

0 ( +0 / -0 )

@fuzzy,

Hard cold cash into my bank account..deposited every month.. I get paid more money in retirement than most average full time, married to their job Japanese make at age 70, being a CEO..and I am just a young buck!

-5 ( +2 / -7 )

About 40% of workers consist of part-time staff and contract workers, double the proportion seen in 1990, many of whom do not belong to labour unions.

You’re kidding yourselves if you expect those doing it tough, scraping by on incomes that have regressed in real terms, to be anything other than disgusted to learn that their ‘betters’ have only been getting 2% annual pay increases these past seven years.

2 ( +2 / -0 )

This pandemic has been a hard lesson but it has been the best wake up call I’ve had for 10 years +

2 ( +2 / -0 )

@Ricky

i'm still quite confused by your posts. Can you go out and spend this new money tomorrow? Or, do you need to wait until retirement age to get access to it? If the former, I'd say don't count on getting it. If the latter, good for you. Either way, maybe you should get your ego in check.

4 ( +4 / -0 )

Fuzzy,

i get ¥155,000.00 more each month to my monthly deposit I get.

-3 ( +1 / -4 )

Abe's policies, dubbed "Abenomics", targeted wages among other reforms to help reflate the economy.

Isn't this the same guy that raised the sales tax to 10%. Any increase in wages went straight to the government. The only people doing well are those that currently own stocks and those in certain high paid industries such as finance, etc. At least housing in Japan is still not so bad.

4 ( +4 / -0 )

Kuroda’s bazooka. Quantitative easing. Devalued ¥en 78/105 or 74% and stealing from everyone’s savings. Meanwhile purchasing stocks and bonds making BOJ the top holder of stocks and bonds in Japan. Kuroda is blowing a bubble. Stocks are now higher than 1989.

Rich people getting richer. Is this going to go down as one of the biggest wealth transfer to the rich in history?

2 ( +4 / -2 )

Rich people getting richer. Is this going to go down as one of the biggest wealth transfer to the rich in history?

Biggest wealth transfer to foreign entities in history. Or the biggest sale of a country to foreign powers.

About 40% of workers consist of part-time staff and contract workers, double the proportion seen in 1990, many of whom do not belong to labour unions.

Japanese bureaucracy will consider this as full employment even if it is not.

The economic reportage of Japan Inc. is more propagandistic than the CCP's.

The hypocrisy of the Japanese state embarrasses the United States a lot of times. Now, no one in Wall Streets to Main Streets ever believes in Japanese figures at all. Those Tobashi practices exist to make beautiful numbers that satisfy the clueless bureaucrats and Nihon ultranationalists.

Even the CCP and VCP strictly enforced independent, external audits, while Japan does not do it strictly. Too many Keiretsu malpractices (like Toshiba and Olympus) are ongoing.

10 ( +10 / -0 )

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