Japan announces biggest wage hike in 33 years
Last Updated on March 18, 2024 5:11 am
Japan’s biggest companies have announced their biggest wage hike in 33 years. A coalition of the country’s top trade unions said they have agreed to a 5.28 percent wage hike this year. However, the rise in wages is expected to prompt the Bank of Japan to quickly withdraw from a decade-long stimulus program. The Bank of Japan is also expected to end its current eight-year run of negative policy rates.
It will hold its policy meeting on March 18-19. Workers at many of Japan’s biggest companies have secured their biggest pay increases in decades as a result of annual bargaining, the Japan Times reported, citing Rengo, the country’s largest labor union.
Rengo says wage growth has averaged more than five percent. Rengo officials announced the results of negotiations with 771 companies last Friday. They said the average monthly salary increase is 16,469 yen or about $110. As a result, wages are increasing by 5.28 percent, which is the highest in 33 years.
Earlier last year, pay increased by 3.6 percent, a record since comparable statistics began in 1999. Japan’s middle class has been hit hard by the central bank’s negative interest rates. They are struggling to meet the cost of living. However, after the negative impact of the central bank’s interest rate policy, the country’s big companies offered to increase the wages of the workers. Many companies in the automotive, electronics and steel industries have fully agreed with the union’s demands. Rengo is now ready to go ahead with discussions with small and medium-sized enterprises. However, the trade union is looking at whether the employees of these companies will be able to ensure a significant salary increase or not.
A private survey last month found that most workers at small and medium-sized companies in Japan expect a pay rise in fiscal 2024. However, the increase will not be the same as last year. Tokyo Shoko Research, a research firm, conducted the online survey in early February. More than 3,800 small companies across the country participated in it. As a result of the survey, 85 percent of the respondents are planning a salary increase in the next fiscal year starting in April.