Japan's wage problem is coming to an end

Small companies falling behind

It is no secret that Japanese companies have been behind the curve when it comes to wage increases.

According to OECD data, from 1990 to 2019, annual nominal wages in Japan rose by 4%, compared with 145% in the US. However, with Japanese inflation hitting its highest peaks in over 40 years towards the end of 2022 due to global price rises, Prime Minister Fumio Kishida has warned that Japan risks falling into stagflation if wage increases cannot keep up. With policymakers also trying to create sustainable demand-driven inflation before eventually moving away from monetary easing, it seems that Japanese companies are heeding these calls and are determined to change this narrative. ...