Japan Businesses and Wage Hikes: Updated March 4, 2026.

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

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

Ideas:
Its good more companies in Japan are going to increase wages but at 60 percent its still too low as the other 40 percent of workers at companies not going to increase wages will still have lower disposable incomes and less purchasing power to spend in the Japanese economy which desperately needs domestic Japanese consumers to spend.

It should be remember that up to 70 percent, as suggested by some, don't work for the large name brand companies in Japan but for small and mid-size companies which may or may not have the needed resources and profit margins to increase wages, even if they wanted too.

So, again, while an increase of 60 percent at these large companies is good, but are some of the small and midi-size companies too going to increase wages for their workers just like those in large companies?

Yes, the key seems to be can wages increase more than inflation or price increases as it seems some or many wage increases are not enough to put the average Japanese household or consumer above the inflation threshold which means their disposable incomes will continue to be less than needed to see any any real increase in consumer spending in the Japanese economy in the future.

Of course, unfortunately, many large companies now are publicly owned companies which means they are controlled by a board of directors and are subject to the whims of some or many stockholders who only think about their quarterly earnings and could car less about the the real stakeholders of the company meaning the day to day workers to actually make things happen in most companies.

Japan's system of payment is a little different than the US payment system as US wages and salaries are much higher while the Japanese wage and salary system is much lower but the Japanese system relies heavily on large bonuses offered in Nov. or Dec. and again around May or before the traditional a week long holiday period called Golden Week which is usually the first week of May.

At the same time bonuses can be as much as 2 to 3 months of wages offered twice a year in Japan. So while Japan salaries look much less than US salaries if you add in the bonuses the wages are equal but at the same time much better than first perceived.

Whether positive or negative many Japanese companies like most or many global companies have become more westernized using western style ideas for either human resource needs and or wage and salary needs.

Many years ago Japanese companies were known for taking care of their workers as they were regarded as the stakeholders of the companies and were regarded as valuable members of the company.

Those ideas have  been eroded over the last 30 plus year, as again, whether good or not so good western ideas have crept into the thinking of many Japanese companies.

So, now as up to 70 to 60 percent of Japanese companies are going to increase wages its possible that some or many Japanese companies are trying to get to the idea that their workers are the real stakeholders and they need to take care of their workers.

And yes, some or many Japanese companies see the need to increase wages as they know their is a supposed labor shortage in Japan and these days and its much easier for workers to leave one company and work for another companies due the other company offering a higher wage, which Japanese workers desperately need now.

For too long, unfortunately, industries that have consistently had lower wages were identified by workers and society and people either didn't want to work for them or couldn't afford to work for them due the low profit margins of some companies which just couldn't afford to pay higher wages.

And as such there appears to be some real labor shortages in some sectors such as the transportation sector, maybe even the services sector and even those who can only afford to pay the required minimum wage.

To be a little positive here maybe the 11.8 percent who are not going increase wages is because maybe they already have wages at high enough level that they are not worried of losing any or too many workers and or they are confident that they can attract new workers with current wages they have now.

But again, as always, small Japanese companies, especially the smallest of the smallest, just don't have the needed resources or the needed profit margins to increase wages and unfortunately they are at risk form losing their workers and even all loss of one or two workers can have devastating effects on their small companies.

The Japanese government needs to step in and find ways to help these companies as its suggested or estimated that up to 45 percent of companies in Japan have less than 20 workers and they can easily be affected by the loss of workers who quit and more to work for another company that can afford to pay higher wages. 

Yes, some companies might be thinking this year it's OK to increase wages but in future years it might not be possible to increase wages. Of course there is a gap between companies that are financially strong and those that are struggling , but whether good or not so good, that is the way of a market economy where some will always do better and some will unfortunately always do less than good. 

Of course income growth needs to outpace inflation but it might not be what companies are able to control exactly as the weak Japanese yen, increasing raw material costs, increasing logistic and supply chain costs, and now with the latest global conflicts energy, gas, and oil prices are set in increase again.

Have a nice day!