Japan's firms offer biggest pay hikes in 30 years, wage growth broadens (updated)
05/07/2023 06:28
(Adds analyst quote, context)
TOKYO, July 5 (Reuters) - Japanese firms offered the
biggest pay hikes in three decades at this year's negotiations
with workers, the country's largest trade union group said on
Wednesday, a development economists say will help revive anaemic
consumer demand.
A survey conducted by Rengo, Japan's umbrella trade union
group, showed pay hikes first reported by unions at the largest
employers in March were now broadening to workers at small and
medium enterprises (SMEs), or those with unions of 300 or fewer
members.
The final survey of 5,272 unions affiliated with Rengo
showed an average pay hike of 3.58%, or 10,560 yen per month,
the biggest increase since 3.9% seen in 1993. Among them, SMEs
raised wages by 3.23%, also the fastest pace in three decades.
Wage growth is one of the key trends the Bank of Japan (BOJ)
is closely watching as it considers if and when it should unwind
its ultra-loose monetary stimulus.
BOJ Governor Kazuo Ueda has repeatedly stressed the need to
keep policy accommodative until wages increase enough to keep
price growth sustainably around its 2% target.
"Rising prices and a chronic labour crunch are driving up
wages, which will continue to rise next year. What's important
from now on is to bring real wages to positive territory," said
Hisashi Yamada, economist and Hosei University professor.
"Rising wages will help stabilise inflation at 2% towards
next year, keeping the central bank under pressure to scrap
yield curve control sooner or later."
(Reporting by Tetsushi Kajimoto; Editing by Sam Holmes)
((tetsushi.kajimoto@thomsonreuters.com;))