Japan Businesses and Wage Hikes: Ideas Later.

60% of businesses in Japan plan wage hikes this spring: survey

Article source: https://mainichi.jp/english/articles/20260227/p2a/00m/0bu/019000c

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TOKYO -- About 60% of companies in Japan intend to raise wages in spring 2026, a survey by research firm Teikoku Databank Ltd. has revealed. The percentage of businesses planning wage improvements has increased for the fifth consecutive year, reaching the highest level since the survey began in fiscal 2007.

The focus of the 2026 spring labor negotiations is whether pay hikes can surpass rises in prices. The survey, conducted in January, tallied responses from 10,620 companies.

Firms expecting to improve wages through base pay hikes or bonuses rose by 1.6 percentage points from the fiscal 2025 survey to 63.5%. Specifically, "base pay increases" rose by 2.2 points to 58.3%, and "bonuses (one-time payments)" increased by 0.8 points to 28.2%.

By industry, "manufacturing" led with 71.5%, followed by "transportation and warehousing" at 69.1% and "construction" at 66.5%. When firms planning pay hikes were asked for their reasons, with multiple answers allowed, "retention and securing of labor" was the most common answer at 74.3%, followed by "supporting employees' livelihoods" at 61.5% and "price trends" at 53.0%.

In industries like transportation, where labor shortages persist, there is a strong push for wage rises. Additionally, 29.2% of companies cited the impact of the minimum hourly wage increase, which saw a national average rise of 66 yen (about 40 cents), the highest ever, in fiscal 2025.

The proportion of companies not planning pay improvements was the lowest ever at 11.8%. However, 30% of firms with five or fewer employees said they would not raise wages, highlighting the challenging business environment for small companies.

In the free comment section in the survey, one steel frame construction company wrote, "We've been able to pass on price increases to some extent and secure profits, but depending on future social conditions, we anticipate wage increases may become difficult." A real estate agency commented, "Due to various rising costs, the gap between financially strong and struggling companies is widening." One container wholesaler answered, "Income growth needs to outpace inflation."