Tue, 05 Dec 2023

TOKYO, Japan: More than half of major Japanese companies are planning to raise wages this year, after Prime Minister Fumio Kishida encouraged them to do so in order to help workers cope with rising retail prices, according to Reuters.

Kishida has urged companies to increase their employees' wages, which have not kept up with the inflation rate, described as the highest in 40 years.

Last week, Uniqlo operator Fast Retailing Co said it would raise wages by as much as 40 percent.

Before spring's "shunto" labor negotiations, managers at 24 percent of the companies polled said they are considering wide-ranging salary increases, along with scheduled wage increases, while another 29 percent said they would carry out regular pay increases only, while 38 percent were undecided.

"Prime Minister Kishida has been saying raise wages, raise wages, but the decision to hike pay is not done on the words of a prime minister or president. Rather, it's because a company needs better human resources to achieve its growth potential," said Masayuki Kubota, chief strategist at Rakuten Securities, as quoted by Reuters.

However, small and medium-sized firms that provide most jobs in Japan are less enthusiastic about Kishida's call.

Among the 495 firms polled in Reuters October survey, 54 percent of companies supported the defense spending plan, but only 29 percent backed the increase in corporate tax rates, while 81 percent said they agreed with a substantial increase in defense spending, but only 20 percent said corporate taxes should be raised to pay for it.

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