Japanese companies are giving their employees the biggest raise since 2013, with an average increase of 5.25% this year. This news comes from the country’s leading union organisation, Rengo.
The recent wage negotiations have been closely monitored, with leading corporations being the first to conclude their discussions earlier in March, and the outcomes of these talks being announced gradually.
The second announcement regarding the results of annual labor talks on Friday showed minimal change from a preliminary figure of 5.28% from the previous week, indicating strong wage growth. The agreed-upon increase of 5.25% corresponds to an average monthly rise of JYP 16,379 yen or EUR 99.58.
As several organisations, especially small firms, reach agreements on pay between April and June, the average rate of pay hikes is expected to be lower as more announcements become available.
Further results are set to be released on April 4th and 18th, coinciding with the disclosure of results from more small firms.
Smaller companies typically negotiate later in the spring, so the overall average may decrease as more results come in. The union will be looking at how widespread the wage hikes are on April 4th.
The government hopes these raises will spread to smaller businesses, which make up most of Japan’s companies and workers. However, some of these companies may struggle to raise prices to cover the higher costs.
Source: Reuters
Featured photo by Andrew Leu on Unsplash
