Workers at Japan's top companies get meager pay hikes

By Tetsushi Kajimoto

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I am actually thinking about letting my car go with the next shakken. It is unnecessary in Tokyo, and with parking, tolls, high gas prices, annual tax of 40,000 yen, plus 130,000 yen or so for biannual shakken, it is getting hard to justify. Will prefer to take more trips and go out to eat rather than have a depreciating asset in front of the house that is rarely used. With that in mind, I can understand Toyota's hesitation to up wages. Cars may be a harder sell in the future.

11 ( +11 / -0 )

Workers at Japan's top companies get meager pay hikes

Yeah, and everybody else got nothing at all! So Mr. Abe, you increased sales tax by 3%, cut corporate tax by 5% and 'urged' companies to increase salaries, which they did not, of course. Now, you have an economy that is worse off then when you took office and created your three arrow plan of economic recovery, which has failed miserably. In the five years you have been in office consumer spending has dropped between 10% and 25% depending on the sector. You are a fraud Abe! You should resign!

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Another triumph of the marvellous Abenomic miracle.

6 ( +7 / -1 )

Finders keepers for the top 5%, it was never going to trickle down significantly beyond boardrooms and J corporate bank accounts. One day soon the public patience will boil over. into rage.

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Reforms on the wages are near impossible. Real reforms are asking the Japanese not be Japanese:

Discard seniority system. Why would all the old power brokers in Japanese firms & LDP retire themselves? Discard harmonious conformity. Why would Japanese who are trained since young abandon their deep seated psychological security pillar? Japanese treasured this more than truth. This is a conformist herd nation. The people in power love such a system as they can rule for a long, long time.
4 ( +4 / -0 )

This isn't surprising at all.

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Japanese companies are so stingy.

It makes me sick.

I hate them and hope they go bankrupt and that the hardworking employees make companies that are more successful and pay a decent wage.

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goldorak, sadly I do think most Japanese people think of a job as a place to belong to, rather than a means to make a living. People stick around and wait for the axe to fall, rather than taking the inventive to look for a better job of their own accord.

This is the culture here.

And it's reinforced by the way that companies hire new cohorts of graduates to join the group.

This is I believe the typical reality facing any worker who looks for a full time job. Foreign companies are an exception.

So why would wages go up? As noted in the article, in this Japanese system wages go up primarily because of age. That's the track people sign up for.

Until the culture is changed through fundamental reforms, wages aren't going to rise in response to economic signals.

And Japan will be lucky to suddenly stumble upon an economic model that is superior to free market capitalism, warts and all. It's not perfect but it's the best system we know for economic growth.

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I've always taken raises that low to essentially be a middle-finger from management. If they don't have the money to give raises, they should use their money to make the business more profitable and just own up to how tight things are at the moment. But to just give a token so small it barely amounts to anything while sitting on enough revenue to clearly be able to afford more, what they're saying is that the employees don't matter.

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I'm determined to make this a great year after the absolute dog that was 2016.

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How much do you want to bet instead of admitting defeat some will say, "I never said how much. I just said 'wage hike', and they did it"? And then it'll be used to justify all the mistreatment.

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Causing inflation through wage hikes will result in an inflationary spiral, but not in economic growth.

Inflation is not a prerequisite for growth. Rather, stable prices are more likely to support economic growth than inflation.

2 ( +3 / -1 )

Families are on tight budgets, it is the same for SME's, no disagreement there. The question has to be asked, where has July 2016 $265 billion stimulus package gone?

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Agree Bertie at the moment staff work 50% plus hours for free, many more require even more from staff. And these companies are teetering on collapse. Doesn't happen in other countries could there be a bigger problem at play?

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@lorem: Because there is no inflation. There is deflation. Would you prefer wages go down?

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In the future the news will be as follows

“Japan’s life time employment comes to an end” It has been reported that foreign workers enrolled under Unions have been asked to leave. They had known this for long but didn’t do anything. Now Japanese workers are afraid of this move and doubt about their own contracts.

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A Dhynamic job environment, reward for up skilling, ability to change jobs without the stigma. Results rewarded competition in the job market. Might help with pay increases as a part of a range of changes required. Days of get hired together die together, are I'm afraid over.

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this is what you get in exchange for life time employment. would you prefer to have a higher raise and less job stability or a meager raise with a salary for life.

Do you honestly think the vast majority of J ppl, in 2017, dream of lifetime employment even/especially as it often means poor wages, stable but boring and unchallenging work environment? It certainly doesn't help increase personal productivity either.

1 ( +1 / -0 )

Katsu, Revenue is not the same as profit.

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I think the spending is not the big problem here. People can't spend more then they need. I don't hesitate to spend on grocery or appliances no matter most of the prices have gone up. It is always the same - USD is up - gasoline and import goods are up. USD is down prices stay the same, and so on.

The big deal for me is the services and education. There families are really struggling. We pay for a whole industry of cram schools and private schools that ask for arm and leg! Landlords are another cast that leave comfortably - real estate and rents are heavy load. Thus corporations should share just a bit more of their profits - period! It's about their future in long run - they will need qualified workers again and again.

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That's right Yubaru, the outlook sucks.

It could be easily changed were there the will to do so. Trump merely promised tax cuts and regulatory reform and the stock market jumped, from already elevated levels. Abe himself got such a boost when he promised regulatory reforms. Imagine the response if he actually grew a pair and enacted those reforms! If they create a whole new Japan where people have a go get em attitude then companies that are worth their salt will raise wages to keep and attract talent.

Dream on though.

Big a, anyone who wants a share of corporate profits can get a bigger one by buying Japanese stocks. That's what being a shareholder is.

I'm not touching Japanese stocks until I see serious changes though.

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One day soon the public patience will boil over. into rage.

We may live in hope

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This "seniority-based system" I keep reading about doesn't seem to apply to me. There is a number on my pay slip that increases every year, but the basic salary remains the same. Now that inflation is positive these "meagre" pay rises may leave many workers worse off than last year.

Funny how Abenomics isn't talked of so much these days, isn't it.

1 ( +1 / -0 )

fzgai - Causing inflation through wage hikes will result in an inflationary spiral, but not in economic growth.

This would be true in a normal economic situation, but corporations were given major tax cuts to allow them to increase salaries without creating inflation. However, they just kept their tax cuts to bolster their profits and stocks and did not pass it on as salary increases. This resulted in a major downturn in consumer spending spiraling the economy even further into its slump.

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Disillusioned, I think consumer spending is poor because people are concerned about the poor economy. All the deficit spending the government does never results in a better economy - because people still see the poor economy and save any extra money they happen to stumble on. This virtuous circle idea of Abe's will never work either for the same reason.

The whole economy needs broad reforms. But it'll never happen until after a massive crash or (lordy forgive) war.

We can hope of course.

BertieWoo, yeah I think most companies make nothing. Those that have higher profits under Abenomics only have them because of the currency manipulation that has been undertaken. Production hasn't increased, the yen has just weakened. They be poor businesspeople (like Toshiba) to ramp up production on the assumptions presented by Abenomics. Unless the third arrow actually comes

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Inflation here is non-existent. That's the problem, where other industrialized countries raise wages to counter inflation and the cost of living, Japan's wage have stayed basically the same for the last 20-50 years so now you can earn more in your own country than here. No incentive for foreign staff to come now and the only incentive to stay here is those with kids at school that don't wanna leave their friends.

0 ( +0 / -0 )

If the company isn't making more money, how can they increase salaries?

Major Japanese companies are making profits and can raise wages. It's their fears that the economy is going to tank even more, if such a think is possible, that stops them from raising wages more.

This is common knowledge, for anyone who pays attention to whats going on here that is.

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Fricking typical.... think about it. Japanese salaried employees are the most screwed employees practically in the world. They're like indentured servants but for life. And why do I say that? Because, in general, they cannot expect to leave their job and find a higher paying position elsewhere. Therefore.... they're stuck. In much of the rest of the world, you quite often cannot find a better paying job unless you switch companies..... that does not, for the most part, happen in Japan. And the other crazy thing is.... in much of the rest of the world, where companies pay more, those companies are doing fine... they're making money and paying dividends and growing. So where is or what is the benefit of continuing to do things the "Japanese Way", if no one is actually benefiting?

0 ( +1 / -1 )

"If the company isn't making more money, how can they increase salaries?"

Japanese companies are earning their highest profits in history, (thanks largely to Abe).

Corporate managers, meanwhile, are liars and hypocrites. They cited a "strong yen" and "uncertainty" over the Trump election to contrain wage hikes. Well, the yen is actually quite weak and expected to weaken after the Fed's rate hike, while Trump's election triggered a surge in stock prices and a fair bit of optimism. Time for the revolution, comrades!

"I think consumer spending is poor because people are concerned about the poor economy. "

You think wrong. Japanese workers have endured wage stagnation and wage cuts for over 2 decades. Kinda makes a difference and molds a spending mindset.

0 ( +1 / -1 )

"I think consumer spending is poor because people are concerned about the poor economy. "

You think wrong. Japanese workers have endured wage stagnation and wage cuts for over 2 decades. Kinda makes a difference and molds a spending mindset.

I don't think wrong. People have been concerned about the poor economy for over 2 decades.

It could be changed if the right policies were enacted. Abe seemed like he had a clue with his talk of a 3rd arrow but has failed to follow through. He could have gone down as a great historical figure had he done so.

0 ( +0 / -0 )

that is still a better pay raise than companies in most other countries. I know a person in the US working for the same company for 10 years not one pay raise. $11 a month raise is the worst raise in 4 years, I would say that is a healthy economy.

-1 ( +0 / -1 )

It is not surprising at all. Many workers in private companies in other countries get meager raise and sometimes none. Unless you are government workers that you can vote yourself with hefty raise regardless of performance. That explains why many people in those countries see government works as lazy, greedy and useless dead weight.

-1 ( +1 / -2 )

@JapanToday: '...Major electric machinery makers such as Mitsubishi Electric and Panasonic Corp, like Toyota, lowered their wage hikes ...' 3,0000 yen the previous year. How much is 3,0000 yen?

-1 ( +0 / -1 )

Why all the complaining? I managed to increase my income by 12.4% this past fiscal year.

Be sure to buy in season vegetables and fruits and you will save a lot of money.

-1 ( +2 / -3 )

Why can't Japan have an index-based system like in some European countries where wages rise automatically according to inflation?

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JeffLee, in not wrong you just have poor comprehension skills.

Japan's consumers have been gloomy about the economy for two and a half decades, this is not a new thing.

And it could be addressed if there was the will, but there isn't. There is still a desire to believe in a fantasy world.

mrjgb and saikopsycho spot on.

-1 ( +0 / -1 )

Bunch of idiots.... consumer spending is poor because the population is ageing and declining at the same time.

-1 ( +0 / -1 )

Can't get blood out of a stone. If the company isn't making more money, how can they increase salaries? Where does Abe imagine money comes from?

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"Another triumph of the marvellous Abenomic miracle."

It seems you didn't read the entire story. "From the early 2000s, base pay raises were virtually frozen for over a decade until Abe swept to power...He urged companies to lift wages and they complied, to a degree."

I'm curious as to why everyone here wants to blame Abe, when in fact it's the corporations - against Abe's wishes - that have decided to hoard their cash. Let's put blame where blame is due.

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this is what you get in exchange for life time employment. would you prefer to have a higher raise and less job stability or a meager raise with a salary for life.

-5 ( +3 / -8 )

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