Japan Labor Union and Wage Expectations. Updated Oct. 26, 2025.

Japan's largest labor union to seek 5% or higher pay hike next spring

Article source: https://mainichi.jp/english/articles/20251024/p2g/00m/0bu/014000c

Ideas

Japanese labor unions and Japanese companies have a more cooperative relationship than the typical adversarial style of maybe South Korea or the US.

As a result Japanese unions can usually bargain in good faith without having to result in strikes with of course is very common in the US.

That doesn't mean Japanese labor unions get everything they want, which they don't, but it's a more cooperative atmosphere when negotiating.

Many times, labor unions always ask for more at the beginning of negotiations with the full knowledge they might not get it but then begin to negotiate in a more realistic tone. 

Real wages in Japan have fallen behind inflation which means consumer purchasing power of Japanese workers have been decreasing mostly since the pandemic when inflation became more significant.

As a result of less purchasing power of most Japanese workers they have less to spend in the Japanese economy and most likely of course have less disposable income to use on whatever they want.

A 5 percent increase or higher in wages, for large companies might be achievable but a increase of 6 percent for small and mid-size companies might not be realistic and most small and mid-size companies just don't have the resources needed to pay that much in wage increases.

Many if not all small and mid-size companies have very thin profits margins and they have very little room in even getting a small wage increase much less a 6+ percent wage increase.

Japanese companies, large, medium, and small are not very equal compared to Germany where the companies of all sizes are relatively equal.

In most cases or many cases in Japan the small and mid-size companies are suppliers to the large companies, which means the large companies dictate the price of supplies coming from the smaller companies, which means they usually don't get the price they want or need, which makes their profits margins very thin.

A hour wage increase of 1,300 might sound good or better than nothing, which it is, but tell that to a minimum wage worker who has to support a family or a single mother who has to support her child on just minimum wage.

But again, if there are small Japanese companies that rely on minimum wage labor, they might have no choice as they most likely can't afford to hire regular hourly wage workers for their companies.

The 5.25 percent increase in April of 2025 was good but most likely, again, that was mostly for large company workers as small and mid-size company workers might have received much less.

Finally there is a huge divide between what the name-brand large company workers get and what the small and mid-size workers get, which make up almost 70 percent of the Japanese work force. So because of the large different between the two groups, most likely consumer spending in the Japanese economy is not going to improve until the difference between the two groups is reduced significantly.

Have a nice day!

Job Change in Japan and Pay Increases: Updated March 16, 2025.

35% of people who changed jobs in Japan saw 10%-plus pay raise at smaller firms in FY23.

Article Source:  https://mainichi.jp/english/articles/20250305/p2a/00m/0bu/020000c

Ideas:
It's possible those who received pay raises at small and mid-size firms, might have been unhappy working at a large Japanese company and or the lower wages and the benefits too was not to their liking.

And as the article suggests, small and mid-size firms know they need to increase their salaries, so they can to attract the best possible workers for their company.

The challenge is of course, that maybe many small and mid-size companies don't have the resources to match the large companies or even out-bid them for the workers they need.

At the same time, its very possible that workers in Japan are not looking of the large company experience and want a different experience with maybe a better work-life, but then again, the article does suggest that the workers who did switch to a small company did actually get a higher salary.

Large Japanese companies get all the news and small and mid-size companies rarely get any news, but that is also global as large companies are always in the news like almost everyday it seems.

Small and mid-size companies, if they have the needed resources are looking for the best candidate for the company and seem to be willing to match what large companies pay or even pay more than the large companies to get the workers they need.

But unfortunately not all small and midsize companies have the resources needed to hire who they want or need, have to take those they can get, as their profits margins just can't handle large wage increases.

Its quite possible the major tourism boom that is going on in Japan now might be helping the hiring boom among small and midsize businesses, as they need to hire more workers to handle the record number of tourists coming to Japan, along with the possible change in the Japanese economy with more people out and about now spending.

As far as the need for IT professionals, all companies now need IT workers and not just IT companies and more and more companies are relying on artificial intelligence to help them be more efficient in the workplace.

Its been estimated that up to 70 percent of the Japanese workforce doesn't work at the large name brand companies but small and midsize companies, and as such the small and mid-size companies, like other economies globally, are the real back-bone of an economy.

Its possible that the large name-brand Japanese companies only hire in April the beginning of the fiscal year in Japan, which, to be competitive and to attract the workers they need, small and mid-size companies might be hiring workers year round to get who they need, instead of waiting until April.

Also small and mid-size companies might be hiring mid-career workers who are very experienced instead of the usual recent college graduates, and mid-career highers might be more reliable and have needed work experience.

Unfortunately, not all is rosy for many small and mid-size companies as the Japanese economy is facing a so-called labor shortage as some companies can't find the workers they need and or can't afford to pay the wages or salaries that workers want to change jobs.

So while some small and mid-size companies might be doing much better and can offer salaries better than the large Japanese companies, they might be a minority as small and mid-size companies have major challenges trying to attract the workers they need.

Have a nice day!

Japan Bankruptcies due to labor shortages: Updated October 24, 2024.

Record 163 firms went bankrupt in Japan in April-Sept. due to staff shortages

Article Source: https://mainichi.jp/english/articles/20241007/p2a/00m/0bu/022000c

Ideas:

The hiring landscape in Japan maybe has changed significantly, and maybe some workers are unwilling to take jobs that many would have years ago.

The so-called labor shortage in Japan is real and probably is not going to change anytime soon unless Japan can find a way to increase favorable immigration policies which can provide good jobs for foreigners and not just the low-wage trainee jobs being offered.

For Japanese workers, they see and know many companies are giving wage increases, not only to workers at the company, but also newly hired workers with substantial wages to attract the best talent they can get.

Small and medium size companies that can't afford to pay the wage increases that large companies can afford are losing out.

And as the article suggests sectors such as the construction industry might actually want to pay the higher wages, but these days, many young workers don't want to work in the construction industry.

The logistics industry companies might be suffering because of the need for long work hours, as again, young workers don't want to work the long hours, that maybe their fathers did some time ago.

Sometimes good intentions by a government can make it difficult for some sectors as the case with truck drivers and overtime restrictions. Maybe the answer is less restrictions for some industries which are having labor shortage problems.

Small businesses of course feel the full effects of the labor shortage as they don't have the resources needed to hire more workers or pay good enough wages to attract any new workers.

The Japanese government, for example, should put into place immigration policies which can help small and midsize companies hire foreign workers to help them stay in business, and maybe allow them to offer a little lower wage than the minimum wage as needed.

What the new Prime Minister says is good but it doesn't solve the situation for small companies that can't afford hefty wage increases.

Again, the Japanese government, if needed, if Japanese workers are not going to work for small companies, they need to have some good immigration policies that can bring in the type of workers needed for the small Japanese companies.

Wage increases are good and needed, but the reality is, many small and midsize companies can't afford to match the wage increases of large Japanese companies and that is the main problem, as young workers know this, so they don't want to work for a small company that when they can get a job at a large Japanese company with better wages.

What the article suggests is good, but some companies can't afford to wait to prove they can earn good profits and sales from their core business. The waiting time might be too much and they will then be in a position to possibly go bankrupt.

Yes, large companies, for the most part, are not the problem, its the small and midsize companies that can't afford wage hikes or even afford to hire new workers, or even give their existing workers a good wage increase.

Unless the Japanese government changes some of its labor or immigration policies, not much is going to change, as Japan needs foreign workers to come in and work in the small and midsize companies and then the small and midsize companies can get back to business as usual.

Have a nice day!

Japan Small Firms And Wages: Updated Dec. 4, 2024.

 

Rate of small firms in Japan hiking wages rises to 63% in FY 2024

Article Source:  https://mainichi.jp/english/articles/20240422/p2g/00m/0bu/020000c

Ideas:
Its good that small and midsize firm are giving wage increases, but most likely they just don't have the profit margins as large Japanese companies do, and as a result the increases wage will be much smaller.

At the same time, as there is a so-called labor shortage in Japan, small and midsize companies are giving wage hikes as they need to make sure that they can get the best talent possible, and the wage increases might help.

It must be remembered, that 70 percent of the Japanese workforce don't work for large Japanese companies, but small and midsize companies only,

Japanese small and midsize companies are in a difficult situation as maybe they again, don't have the profit margins that large companies do, which means their labor costs and material costs are much more significant compared to large companies.

And then there is the idea of passing-on increased costs to the next in the supply chain, which most likely is the final retail customer, as maybe customers are elastic, meaning they react significantly to price increases.

And yes, there might be some or many small and midsize companies that just can't afford wage increases, which might mean their current employees might be looking to change jobs to a company that can give wage increases.

Sometimes it is assumed that most people work for large companies and the same in Japan, but the fact is around the world most people don't work for large companies, but the challenge is small and midsize companies need to pay the same as large companies but many of them don't.

Another part with small and midsize firms is many of them in Japan are suppliers or contractors for large Japanese companies, which puts them in a very difficult position.

If they are a supplier or contractor for a large Japanese company, most likely the large company might put pressure on the small company not to increase parts or service charges, and if they don't agree, they could lost their contracts.

And that means as material prices increases along with energy prices their profit margins shrink which means they can't increase wages like large companies can do.

If small companies can't increase wages that means their employees can't afford to pay their bills and or they have little or no disposable income left to use in the Japanese economy.

And then, again, there is the idea of labor shortages which means those employees, might want to change jobs to companies that can have wage increases, as its possible there are more jobs available to choose from.

As 70 percent of Japanese workers don't work for large companies, and as the 70 percent might not get the wage increase that large companies do, that then means a large group of workers in the Japanese economy can't spend much and consumer spending will not be enough to help with economic growth.

Most likely many companies were fearful of losing employees if they saw other companies increasing wages and they weren't.

They all know inflation is out there but they wait and see what the other companies are going to do about it. When a market leader or influential company such Sony or Toyota or Panasonic finally increase wages then other companies begin to do the same thing.

As, again, as there is a so-called labor shortage, many companies are afraid of losing their best workers and so they begin to improve benefits and other situations in a company including increasing wages.

Have a nice day!