In Japan, an unprecedented increase in the level of wages
For the Japanese economy, which has been going through a very long period of stagnation for thirty years, is this finally an improvement? According to a survey produced by the economic newspaper Nihon Keizai Shimbun in April among more than 360 Japanese companies, the country’s salary level increased by 5.67% on average this year compared to 2023. “This is the first time that we have recorded such a high increase since 1990,” recalls the newspaper.
A similar survey, conducted by the Japanese employers’ union Keidanren and published on May 20, confirms this trend within the country’s large companies, with a wage increase rate of 5.58%, reports Japanese public broadcaster NHK.
At a time when Japan is faced with inflation and the weakness of the yen against the US dollar, this is obviously very good news. Especially since, to escape the deflation that has plagued the country since the mid-1990s, government officials and those of the Bank of Japan are calling for a “virtuous cycle between increasing prices and increasing wages”.
Retain your employees
Ironically, it is inflation and the decline in the working population, a consequence of demographic decline, which have inflated pay slips, according to the survey in the economic daily. Asked about the reasons for these decisions, 68% of companies cited the price increase, while 42% responded that they were facing a shortage of workers. “It appears that they are trying to retain their employees through salary increases,” notes the newspaper.
However, due to the historical weakness of the national currency, which further exacerbates inflation, the level of real wages (an index which measures purchasing power after removing the effects of the rise in prices of goods) fell back in March for the 24the consecutive month. “The important question is whether this increase in wages will take hold over time,” Write the Nihon Keizai Shimbun. On this point, Hisashi Yamada, economist and professor at Hosei University, is rather optimistic: “For growth, recruiting staff is essential for all businesses. The improvement of pay slips will continue,” he analyzes, quoted by the daily.
