About 25% of Japanese firms raising winter bonuses; tourism showing strong performance
TOKYO -- Nearly 25% of some 10,000 companies in Japan told a recent survey that they are raising winter bonuses this year.
According to survey results released by research firm Teikoku Databank Ltd., 24.1% of businesses said they either have already paid winter bonuses with an increased amount or they are going to, up 2.9 points from 2022.
Broken down by industries, travel-related businesses, such as ryokan traditional Japanese-style inns, hotels and other lodging service providers, as well as companies involved in paper, stationery and book wholesale businesses including posters and flyers, showed tendencies for higher bonuses. Forty-two percent said the bonus amounts remained the same from last year, while 13.8% answered that they were giving smaller bonuses.
Ideas:
Bonuses in the winter and summer, twice a year, are common in Japan, but not so common in the US. Perhaps the bonuses makeup for the smaller salaries in Japan compared to the US.
Despite the continued inflation in Japan, some companies feel bonuses are still an important part of Japanese company life.
Even though some companies might have had not so good years due to the inflation situations, they still gave bonuses.
Article:
Meanwhile, 12.2% told the survey that they were not paying winter bonuses this year. Broken down, 40.2% of textile, textile product and clothing retail businesses answered no bonuses, topping 40% for two straight years. In other industries, 32.3% of restaurants also said they were not handing out winter bonuses. At the same time, the no-bonus percentage in the textile and restaurant industries has dropped by over 5 points from the previous year, meaning that fewer companies are giving out zero bonuses.
On the other hand, 10.3% of companies surveyed said they've increased winter bonuses for two years in a row, up 1.7 points from 2022.
Ideas:
So it seems like again, some or many companies have either decided or not decided to give the traditional winter bonus, maybe depending on what their profit margins will allow, and maybe depending again, on how much they have been affected by the inflation situation.
The article doesn't say, exactly, whether the companies are large companies, midsize, companies, or small companies give bonuses or not giving bonuses.
But regardless of company size, again, bonuses are a big part of traditional Japanese company culture.
Maybe some households, because of the inflation situation, depend a lot on the bonuses to help them cover costs to due inflation.
Article:
Some comments from the businesses that are raising bonuses include: "We're seeing a higher backlog of unfilled orders than the economic bubble period (in the mid-1980s to early 90s)" by a steel frame construction firm; "Tourist numbers are recovering and people are going back to the office" by a convenience store operator; and "There is growing demand by inbound tourists due to the weak yen" by a ryokan operator.
Tourism-related businesses and agriculture, forestry and fisheries industries are showing strong performances, with the dwindling of the COVID-19 outbreak and the weak yen helping the former and the latter seeing more businesses with restaurant industries. This may have helped fuel higher winter bonuses.
Ideas:
Winter bonuses are good and needed by many households in Japan, but will companies, in April of 2024, still give wage increases too?
It seems many Japanese companies, according to this article, are now doing much better since the pandemic has ended.
Maybe getting ahead of this article and article in December and January of 2024, it seems that maybe Japan is headed for another textbook style recession, which is two consecutive quarter of negative economic growth.
Article:
Meanwhile, Japan continues to see a slump in real wages where pay hikes aren't keeping up with price increases. Teikoku Databank commented, "Raising bonuses is hoped to trigger consumption growth."
The research firm surveyed 26,972 companies nationwide online in November and received responses from 11,396. This is its fourth survey on winter bonuses since 2020.
Ideas:
Most likely the winter bonuses by Japanese companies companies will allow some households to spend some of the bonus and save some of the bonus.
An economy needs a balance of savings and spending for it to be in its perfect balance.
But maybe, for some, the bonuses will be used for helping them with the inflation situation, and not so much related to savings.
There might be a small spike in consumption growth or consumer spending, but it doubtfully Japanese consumers are going to go on a spending spree after they get the bonuses.
Have a nice day and be safe!
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