TOKYO (REUTERS) – More large Japanese companies are now raising wages to attract workers and cope with chronic staff shortages, a monthly Reuters poll showed on Thursday (Aug 18).
It is a tentative sign Japan Inc may be slowly addressing pay that has been flat for decades.
Still, the Corporate Survey found that higher wages aren’t yet the go-to tactic for companies.
Instead, digitalisation is seen as the most popular among the multiple measures firms say they are using to address the labour crunch.
Japanese companies have typically avoided boosting wages because decades of deflation made it difficult to pass on higher costs to consumers.
That might now be changing, as the double whammy of higher commodities prices and a weaker yen drive up living costs, and highlight the strain on workers.
Prime Minister Fumio Kishida has also called on companies to hike wages.
“Overall we are facing labour shortages and we are struggling to lure part-timers at stores in particular. We are responding by raising wages but there’s a limit,” the manager of a wholesaler wrote in the survey, on condition of anonymity.
The poll of 495 big non-financial firms, taken from Aug 2 to Aug 12, highlighted what appeared to be a growing willingness by companies to increase wages.
The hiking of wages or starting salaries was picked by 44 per cent of respondents as one of the multiple tactics they are adopting.
That compared to just 25 per cent of companies that said in a 2017 Corporate Survey that they would increase salaries.
A full 59 per cent picked going digital and other measures to save manpower as one of their tactics.
“The tide is changing as labour shortages have prompted more and more companies to raise wages albeit gradually,” said Koya Miyamae, a senior economist at SMBC Nikko Securities.
“Now is just the beginning, as the population increasingly ages and dwindles, the momentum to hike wages will gather steam,” he said.