Small- and medium-sized companies hold the "key" to raising wages nationwide in the upcoming annual wage talks, the head of a leading Japanese business lobby said Tuesday, amid a trend in which major firms have been raising salaries to outpace inflation.
At a New Year event hosted by three major business groups, Takeshi Niinami, chairman of the Japan Association of Corporate Executives, expressed readiness to support these firms, which employ around 70 percent of Japan's workforce, in passing rising costs onto their clients. The firms have been reluctant to do so for fear of losing business opportunities.
"Now is a critical time to establish a mechanism to consistently increase real wages," Niinami said at the gathering, also attended by top executives from the nation's leading companies.
His remarks came as attention is focused on whether small and midsize firms, whose employees typically receive more modest raises compared with those at larger firms, will join the wage hike trend.
The government of Prime Minister Shigeru Ishiba, who took office in October, has been seeking to establish a positive cycle of wage and price hikes.
Japan's inflation-adjusted wages have been weighed down by surging prices, even after domestic companies agreed to the highest salary raises in three decades during the "shunto" spring wage negotiations between management and labor unions.
For fiscal 2024 through March, major companies decided to increase monthly pay by an average 5.58 percent, surpassing 5 percent for the first time since 1991, according to the Japan Business Federation.
Ryuichiro Nishiyama, president of Seibu Holdings Inc, who also attended the event, said the major department store operator plans to implement pay increases exceeding last year's level, noting that "the economy's virtuous cycle has reached a favorable stage."
© KYODO
11 Comments
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Japanoob
....said the heads of major corporations.
iron man
inviting profitable M&A?
David Brent
Meaningful wage increases at SMEs in Japan? Never gonna happen.
BertieWooster
I don't understand the game they are playing, but I get the very strong feeling that we are about to be right royally screwed once again.
Simon Foston
Delusional. Until a lot of those companies either merge or get taken over they'll always be a major drag on the economy.
Aoi Azuuri
Past decades, Japan's "major firm" groups including him who arrogant remarks to force defective "My Number Insurance Card" was criticized have practically bribed LDP by political contribution, have been treated preferentially such as reducing corporate taxes in exchange of increasing social burden to general citizen, furthermore, they are accomplices of kleptocracy that snatching billions or trillions from taxpayers money as their profit by steamrolling unnecessary policy with LDP.
But, what ballooned to largest ever are only profit and internal reserve of "major firm" and tax revenue, international competitiveness is down, present GDP per person is lower than Taiwan and South Korea, inequality or poverty expand at society, low birth rate continues, the lives of social vulnerable are disrespected and recovery of damaged area where massive natural disaster hit is delayed deadly.
JeffLee
Yeah right. japan's inflation has always been below that of its peers. The real reason is Japan's tightwad employers, many of whom are raking in record-high profits.
Sven Asai
They just hold nothing, because that key is the money to distribute in wage raising negotiations. And they don't have or hold it otherwise they would already have done a little bit in former negotiation rounds.
kurisupisu
Japanese workers are seeing high inflation and thinner pay packets!
https://www.reuters.com/markets/asia/japan-nov-real-wages-fall-4th-straight-month-inflation-weighs-2025-01-08/
Brian Wheway
5% on top of a dismily low wage doesn't add up to anything after you've been taxed, I can't see any one getting excited about this, seriously to make a difference you need to be paying at least 10% and possibly a 1 off bonus now this will put a smile on your staffs faces
Cephus
Any employer worth his/ her salt, shares profits with the employees. Capitalism as great as it is unchecked greed creeps in