Uniqlo Salary Increases:

 Article Source: https://mainichi.jp/english/articles/20230111/p2g/00m/0bu/016000c

Article:

TOKYO (Kyodo) -- Uniqlo operator Fast Retailing Co. said Wednesday it will raise the annual salaries of its workers in Japan by up to 40 percent in March in an effort to narrow the remuneration gap with its employees overseas and increase the company's global competitiveness.

Due to the revision of its remuneration system covering 8,400 full-time employees, the labor cost of the casual clothing chain operator is expected to increase by around 15 percent.

Starting monthly salaries for university graduates will be increased to 300,000 yen ($2,300) from the current 255,000 yen, an annual pay hike of about 18 percent, the company said.

Ideas:

Anytime companies increase salaries most likely there are going to be increases in products as they have to pay for the salary increases. 

But perhaps Uniqlo has enough reserves that it can be generous with is salary increases. 

Even more important if wants to hire the best talent available they know they need to pay salaries that new graduates want and need. 

Even at 300,000 that still still be a little low for good talent and especially if other companies are in the 350,00 range Uniqlo still has a ways to go.

Article:

The monthly salaries of new store managers will be 390,000 yen, up 100,000 yen and an increase of around 36 percent annually. The annual earnings of other employees will also be increased by up to 40 percent, according to the company.

The Japanese government has urged companies to raise wages amid rising living costs, and the global clothing giant's move is expected to affect the annual "shunto" spring wage negotiations between management and labor across Japan.

Chief Cabinet Secretary Hirokazu Matsuno welcomed Fast Retailing's decision and said he hopes other companies will follow suit and raise wages "to the maximum extent."

Ideas:

Perhaps as other companies see what Uniqlo is doing they too will increases the salaries of their employees and new graduates in order to remain competitive and be able to hire the best talent possible.

A 36 percent increase for managers and a 40 percent increase for other employees has to come from somewhere so Uniqlo customers can expect to see increases in prices in the Uniqlo stores soon and Uniqlo will most likely pass on the wage increases to the customers.

Increasing wages "to the maximum extent" might not be possible for every company but every company can probably do something, so something is better than nothing for many wage earners.

Article:

"The best way to address the high commodity prices at the moment is to continuously raise wages to keep pace with rising prices," the top government spokesman said at a regular news conference.

Fast Retailing employees' bonuses are also expected to rise based on the forthcoming changes. The company said it will scrap executive allowances and implement a common grading system for deciding employees' salaries.

The latest pay raise comes after the company increased its part-time workers' hourly wages in Japan by about 20 percent on average last September.

Ideas:

It might not be possible for every company to increase wages but every company again might be able to do something to curb the high commodity prices in Japan. 

Lets hope Uniqlo and Fast Retailing doesn't become too much like a western style company where bonuses and allowance are out of control and still remember that the employee is still a valuable stakeholder in the company.

It's good that it gave part-time employees an 20 percent increase as they too feel the pressure of higher commodity prices.

And even more important, if Uniqlo wants higher quality part-time employees they need to make sure their part-time wages are competitive with others in Japan.

Article:

Fast Retailing posted a record net profit of 273.34 billion yen for the year that ended last August, up 60.9 percent from a year earlier, helped by robust overseas sales.

Operating profit was 297.33 billion yen on sales of 2.3 trillion yen. Both were record highs.

Ideas:

So it looks like Fast Retailing is not just sitting on its record profits but actually using it record profits and spreading their good success to the rest of the company by increasing wages for the good of it employees.

That is very good public relations too which shows Uniqlo and Fast Retailing is not just about higher-up executives but cares about its employees or at least knows to get the best talent possible it has to be good salaries.

But let's hope Uniqlo now will not go crazy and increase prices too much has it has to remember customers are important too.

Have a nice day and be safe!

Companies Encouraged To Increase Salaries:

 Article Source: https://mainichi.jp/english/articles/20230110/p2g/00m/0bu/051000c

Article:

TOKYO (Kyodo) -- Japan's most influential business lobby plans to ask member companies to demonstrate their "social responsibility" by granting pay rises that outpace inflation during upcoming wage negotiations, its final policy draft showed Tuesday.

The guidelines by the Japan Business Federation, known as Keidanren, for corporate managers discussing pay deals with labor unions in annual "shunto" wage negotiations come as Prime Minister Fumio Kishida has urged businesses to give above-inflation wage rises as part of his "new capitalism" growth and redistribution policy.

But it remains to be seen just how far companies will heed Keidanren's request, which is set to be adopted and published on Jan. 17.

Ideas:

As inflation continues on in Japan and as wage earners haven't had a real significan wage increase for a very long time, it only seems logical that Japan's Business Federation was say its a "social responsibility' for companies to contribute for the good of society.

Prime Minister Kishida keeps talking about "new capitalism" but just what is is really. Is nothing more than giving increased wages. Is it giving workers more benefits for the good of society.

Last December Kishida wanted companies to increase wages by at least 3 percent. So just what how much will companies in April increase wages remains to be seen.

Article:

At a Tuesday press conference following a meeting of top Keidanren officials over the guidelines' content, Chairman Masakazu Tokura called for "wage rises across the supply chain" and indicated he wants to see wages rise at a variety of businesses, regardless of their size.

The group's proposals are set to encourage companies to closely monitor price fluctuations while calling on them to maintain and improve the momentum of wage rises as part of their social responsibility.

The final draft also said surging prices present an opportunity for Japan to eliminate the deflationary mindset that has long afflicted the country's economy and emphasized the necessity of creating a "virtuous cycle between pay and prices."

Ideas:

Small businesses might have some challenges increasing wages while larger companies might be more inclined to give wage increases. 

For the good of society and companies to feel good about their "social responsibility", they might feel they have no choice, at this time, and actually increase wages above the inflation level.

The deflationary mindset has long been a sticking point in Japan, but delation has run its course in Japan and now it time to throw off that mindset and allow wages and prices to grow together for the good of the Japanese economy and society.

Article:

Increasing global demand for oil and other raw materials amid Russia's invasion of Ukraine has driven up their prices, and the Japanese yen's weakness against other major currencies has also lifted import costs.

As a result, a growing number of companies have been passing on higher costs to consumers, dealing them a blow at a time when wage growth has not kept pace with accelerating inflation.

Core consumer prices in Japan climbed 3.7 percent in November, a nearly 41-year high.

Ideas:

Yes, inflation is still a major challenge for the Japanese economy and society and the weak yen compared to other currencies is still a major challenge which is distorting imports prices.

If there was just inflation and not so much a Japanese currency challenge import prices might not seem as big a challenge as exists at this time.

Of course without wage increases inflation will continue to the a major challenge for consumers even at 3.7 percent, even though for some it might not a problem but for most families and consumers its a challenge.

Have a nice day and be safe!

Japan Household Spending:

 Article Source: https://mainichi.jp/english/articles/20230110/p2g/00m/0bu/009000c

Article:

TOKYO (Kyodo) -- Japan's household spending in November fell a real 1.2 percent from a year earlier for the first decline in six months, as warm temperatures dented demand for winter-related clothing and goods, the government said Tuesday.

Households of two or more people spent an average of 285,947 yen ($2,200), the Ministry of Internal Affairs and Communications said. On a seasonally adjusted basis, spending declined a real 0.9 percent from October.

By category, spending on clothing and footwear dropped 9.3 percent, down for the first time in nine months, as warmer-than-usual weather weakened demand for winter clothes such as coats, a ministry official said.

Ideas:

Consumer spending always goes through seasonal periods and is subject to the weather as to what consumers always want to buy.

Its no surprise that the warmer temperatures might have reduced spending on winter-related clothing and goods.

So retail outlets probably had to use a lot of sales and or discounts to move their inventory because of the warmer weather.

You might think consumers would then take advantage of the sales to buy clothes for the future.

Article:

Outlays on furniture and household goods such as futon bedding dropped 5.2 percent from a year earlier.

Expenditure on food and beverage items including alcohol decreased 2.9 percent, affected by weakening demand for alcoholic drinks following their price hikes in October, the official said.

Meanwhile, spending on entertainment expanded 7.4 percent, as the soccer World Cup in Qatar held in November to December stirred purchases of new televisions and sportswear, according to the official.

Ideas:

There really no way to know just why some products see a decrease or even an increase sometimes other seasonal demand, inflation, and or other factors not known.

Perhaps as an example, the buying of furniture, household goods, and futons had been bought a lot before so the need to buy again what not so needed.

But a 2.9 percent decrease might be related to inflation and consumers decided not to buy so much related to some food and beverage items.

The Qatar World Cup seems like a long time ago but it was just the past fall, and it's not surprising  that consumers splurged on new televisions and sportswear, just like any major sporting event such as the Olympics or the 2019 Rugby World Cup.

Article:

On a nominal basis, spending was up 3.2 percent from a year earlier, up for the eighth straight month, reflecting the impact of inflation.

Household spending is a key indicator of private consumption, which accounts for more than half of the country's gross domestic product.

Ideas:

The 3.2 percent increase in nominal spending, it should be remembered is not real spending but inflation related to inflation meaning inflation is included in the prices and spending levels.

If we take away nominal inflation what would have been the real spending over the eight month period.

Household spending or consumer spending, in Japan, never reaches the level of spending like in the US or even the EU, as Japanese consumers seem to be more conservative in their spending habits.

Of course that might be related to Japan now being an aged society and the aged tends to spend less that the younger generations.

But a recent survey showed that in Japan those in the 18 to 65 age groups spent as much or more as those on other advanced countries, but the problem is the 65+ age groups are becoming larger and spending less overtime.

Have a nice day and be safe!

Japan Consumer Prices:

 Article Source:  https://mainichi.jp/english/articles/20230110/p2g/00m/0bu/007000c

Article:

TOKYO (Kyodo) -- Core consumer prices in Tokyo rose 4.0 percent from a year earlier in December for the sharpest gain in over 40 years, in a fresh sign of broadening price hikes that hurt households and could add pressure on the Bank of Japan to tighten its policy, government data showed Tuesday.

Tokyo's core consumer price index excluding volatile fresh food items rose by the most since April 1982 when it gained 4.2 percent. The gauge, seen as an indicator of what to expect nationwide, was above the BOJ's 2 percent target for the seventh straight month.

In 2022, core consumer inflation accelerated 2.2 percent from a year earlier, topping the 2 percent threshold for the first time since 2014.

Ideas:

It must be remembered that the Bank of Japan's 2 percent target was never really about wholesale price increases but more about consumer spending and consumer demand.

Prices everywhere in the world are increasing and not just Japan. But maybe Japan's feels the price increases more as Japan usually has had lower prices for most products.

The Bank of Japan, it seems, should be under a lot of pressure to follow what the US and the EU is doing with interest rates.

Article:

Stripping away the price-boosting effects of past consumption tax hikes, it was the largest increase since 1992 when a 2.4 percent gain was reported, according to the Ministry of Internal Affairs and Communications.

A growing number of companies have been passing on higher costs of energy and raw materials to consumers in recent months, with Tokyo's core CPI up for the 16th straight month.

Japan initially saw higher fuel costs, partly blamed on Russia's war in Ukraine, prompting the government to give subsidies to oil wholesalers to lower gasoline and kerosene prices.

Ideas:

In 2014 and 2019 there were shocks to the Japanese economy due to the sales tax increases but it took a few months for consumers to get used to the sales tax increases.

But the current price increases related to inflation might not be easy to get used to as inflation just keeps increasing.

Companies in Japan usually don't pass on their costs to the next in the supply chain and they just absorb the cost to protect their customer base, but this time as inflation has increased at a rate not seen in decades maybe now companies feel they have no choice but to pass on their costs.

Subsidies are good but they need to be continued as inflations also keeps increasing over time.

Article:

Price hikes have since spread to other items, notably food, dealing a blow to consumers at a time when wage growth has not kept pace with accelerating inflation.

In December, the prices of food other than perishables leaped 7.5 percent from a year earlier.

Fuel costs remained high, with city gas surging 36.9 percent and electricity up 26.0 percent.

Ideas:

It must be very challenging for low-income earners and fixed income earners as prices continue to cut into any extra income they might have. 

Wages are another challenge as they can't kept up with inflation and even those with good stable jobs might feel their extra or disposable income keeps decreasing as inflation continues to increase.

Even a 7.5 percent increase in food, again, might be too much for low families as they now have to look for cheaper substitutes to make ends meet.

The Japanese government needs to continue subsidies with gas surges of 36.9 percent and electricity up to 26.0 percent, wholesales companies and households are feeling the effects.

Article:

Tepid wage growth is a major reason why the BOJ has stuck to its ultralow rate policy because it views higher pay as critical for the economy to withstand inflationary pressures.

The BOJ is considering raising its inflation outlook for fiscal 2023 and 2024, sources familiar with its thinking said earlier.

Market speculation is persisting that the Japanese central bank will move toward tighter monetary policy after it made a surprise decision last month to expand the trading band for 10-year Japanese government bond yields, a step interpreted as a de facto rate hike.

Ideas:

Wage growth could be the key to boosting the Japanese economy. But wages have got to be high enough that consumers,families, and households feel it enough for them to feel good about what they take home and what they have for extra income. 

For example, a 1 percent increase or something similar will do nothing for the economy.There has got to be bold significant move on the part of companies to get the economy out of its current situation and its not going to happen without significant wage growth.

Inflation should be equaled with the same amount of wage growth and or yearly cost of living increases that keep up with inflation 2023 and 2024.

Have a nice day and be safe!

Japan Company Jobs:

 Article Source: https://mainichi.jp/english/articles/20230105/p2g/00m/0bu/018000c

Article:

TOKYO (Kyodo) -- A recent survey showed 15.5 percent of Japanese firms are planning to hire more university graduates in 2024 as new employees from the previous year, reflecting an increased willingness to hire amid a recovery from the coronavirus pandemic.

The survey said only 3.6 percent of firms that responded are considering cutting back hiring students scheduled to graduate from universities and graduate schools in 2024, according to the Recruit Works Institute.

The figures improved from the same survey conducted the previous year, in which 10.9 percent of firms said they would increase new graduate hires in 2023 with 3.9 percent responding otherwise.

Ideas:

Japanese companies by now should be in a good enough position to begin to hire more university graduates after a three years of less than normal hiring.

But of course it depends on the industry and sector and the domestic or international environment.

A willingness to hire it not exactly the same thing as actually hiring. Only time will tell as to how many companies actually hire in the future.

Article:

The results are attributable to "improvement in business sentiment while labor shortages continue," said Hiroyuki Motegi, a researcher at the institute.

Domestic firms' appetite for hiring new employees has been robust in all industry sectors, the report said. Among them, telecommunications topped the list at 21.7 percent, followed by restaurants and hotels at 20.1 percent.

As it has become difficult for many companies to hire new employees as planned amid fierce competition with rivals, 54.9 percent have already raised their starting salaries or are planning to do so, up 10.4 percentage points from a year earlier.

Ideas:

Labor shortages is a sign of either companies not enough salaries that new graduates want or need and or graduates are looking for better work/life work conditions.

Most likely telecommunications companies are more cutting edge and maybe more progressive and are willing to experiment with work/life balances that you workers want not to mention the need for improved salaries.

Starting salaries have just been a challenge in Japan and with inflation the way it is the need is for companies, in order to get the best talent they need to offer the best salaries that they can afford.

Article:

The survey covered 7,200 private companies with five or more employees across the country, of which 4,341, or 60.3 percent, replied between October and November last year.

Meanwhile, a separate survey by job hunting information provider Disco Inc. found that 56.3 percent of university students scheduled to graduate in 2024 expect job hunting to be more "severe" than the previous year, citing negative economic factors such as Russia's invasion of Ukraine, rising prices and a weaker yen.

It also found that 71.7 percent of the respondents are not satisfied with their lives at universities due to pandemic safety measures that have made it difficult for them to answer the question, "What did you focus on during your university life?" -- something frequently asked during job interviews.

Ideas:

Small companies, of course, will have more challenges providing the work/life balance and salaries that big companies might be able to afford. But the opposite could be true, as maybe smaller companies are more flexible and able to do more things.

It's always been a challenge for future university graduates to focus on their studies and having to do a lot of interview during their final year.

It might be more beneficial if companies didn't put so much pressure on the hiring process and allow and more flexible hiring style if at all possible.

Article:

According to the survey, a female student said many people in her grade who entered university in the spring of 2020 during the early stages of the COVID-19 outbreak are now moving into the next grade without being able to take on new challenges.

The online survey collected 1,040 answers in November.

In Japan, where the academic year starts in April, a large number of companies annually hire new graduates in bulk and university students typically start their job hunting about a year before their scheduled graduation in March.

Ideas:

Maybe companies should move away from the bulk hiring system and hire year round and at the same time, move away from the idea of one system to provide as much flexibility as possible.

Its unfortunate that young graduates have to spend their entire last year only looking for a future job. They should be able to focus on their last year of studies and not have to miss classes because of job interviews.

The hiring system needs to become more flexible and its seems to be too rigid and too competitive for today's workforce. 

Perhaps the reason why some or many drop out of trying to find a job is it's just to rigid for the 21st century graduate, and a more flexible humane system should be put into place.

Article:

Members of the Japan Business Federation follow guidelines of the country's most powerful business lobby that allow them to hold job orientation sessions from March for juniors and start interviewing and other screening processes in June.

Ideas:

Again why should a 4 year or even a 3rd year student have to spend one or two years away from their studies and not be able to focus on their studies.

The system needs to change and allow for a more flexible system for hiring which limits the amount of time students have to be away from classes just to meet the needs of companies.

But Japan industry or most companies still remain inflexible remain in the 20th century.

Of course there are many companies that have embraced a 21st century approach and are allowing for more flexible hiring or recruitment situations.

Have a nice day and be safe!

Japan Major Company Expectations:

 Article Source: https://mainichi.jp/english/articles/20230103/p2g/00m/0bu/011000c

Article:

TOKYO (Kyodo) -- Only around half of major companies in Japan expect the country's economy to grow in 2023 given soaring prices of natural resources and raw materials triggered by Russia's war on Ukraine and the weak yen, a Kyodo News survey showed Monday.

In the survey of 117 companies, including Toyota Motor Corp. and SoftBank Group Corp., 65 firms, or 56 percent, expect solid expansion or moderate growth in the world's third-largest economy in the year ahead, sharply down from 84 percent a year ago.

The overall percentage of firms forecasting growth was at its second lowest in 10 years in the survey, with responding companies also cautious about slowdowns in the United States and China in 2023.

Ideas:

Solid expansion or moderate growth is probably being optimistic as Japan's overall economic growth is usually only around 1 percent. 

But it was be remembered, that although Japan's growth is usually low, Japan's economy is very stable and rarely has any major shocks. 

Maybe a year ago as the Japanese economy was coming out of the pandemic period there was more optimism and maybe the Ukraine situation hadn't started.

The slowdown in the US has not really materialized yet, even though inflation is still very high. As far as China goes it's hard to predict just what is happening in China.

Article:

In the survey, carried out between late November and mid-December, 40 firms, or 34 percent, said they believe the economy will be flat while seven predicted a moderate contraction. None believed the economy would fall into a recession.

With multiple answers allowed, an overwhelming 92 percent of the companies that expect growth cited a recovery in consumer spending after its plunge due to the coronavirus pandemic.

Of the responding companies that did not expect growth, 70 percent cited rises in prices of natural resources and raw materials, followed by 45 percent forecasting personal consumption would be sluggish. Forty percent of the firms also cited slowdowns in both the United States and China, respectively.

Ideas:

It's interesting that no company believed that Japan would fall into a recession. Maybe that's because the Japanese economy, while being a low growth economy is a one of the most stable economies globally.

Consumer spending is always predicated on wage growth as at this time, there might not be enough wage growth to make consumers feel good about their wages.

Continued increase in prices will keep consumers and company spending down for now and yes consumer spending or consumer consumption will be constrained because of the continued increase in prices.

The slowdown in the US hasn't developed just yet, but there is alway a possibility as inflation is still at an all time high.

Article:

As for companies' evaluation of the rapid depreciation of the Japanese yen against the dollar, 43 percent saw it as having a positive impact on earnings, exceeding 23 percent taking it as a negative.

Exporters can benefit from a weaker yen, which boosts their overseas profits when repatriated.

But when asked about the impact of the weak yen on the Japanese economy, the outcome was reversed, with 32 percent saying it is negative and only 3 percent seeing it as positive. Many companies did not provide answers to the question.

Ideas:

Perhaps the Bank of Japan has been correct in not increasing the key rate as it keeps the Japanese yen low which of course is good for exporters.

As yes, as far at the domestic economy goes the weak yen is not so good as then import prices on everything is much higher, which if a company is not involved in export activities they feel the full effect of the weak yen if they import products.

Again perhaps, at this time the Bank of Japan is prioritizing exports and export growth for the good of the overall economy and not placing an emphasis on the domestic economy and leaving that the the Japanese government to sort out the details.

Article:

With consumers hit by hikes in prices of daily necessities, including food and energy, due to rising material costs and the weak yen, the nation's annual "shunto" spring wage negotiations between management and labor are expected to attract particular scrutiny.

A total of 36 percent of the firms said they plan to or are considering raising salaries, but 48 percent said they were undecided at the time of polling.

With regard to items in Prime Minister Fumio Kishida's policy agenda, the survey showed that around half of the companies back the promotion of digital transformation and measures to reduce carbon dioxide emissions and promote renewable energies.

Ideas:

The spring wage negotiations are going to be interesting. Some might say or have said Japanese companies sit on large sums of cash while some might be marginalized because their profit margins are too weak for any wage increases. 

Its 4 months before wage negotiations begin and or before April 2023 when the new fiscal year begins so there is a lot of time for companies to survey the economic environment and then decide what to do.

All of the ideas promoted by Prime Minister Kishida are good but the real challenge is getting companies to buy in the idea of transformation and all the ideas cost money and take time to implement.

Article:

Digitalization and decarbonization are both pressing issues companies need to tackle but require long-term investments in research and development and capital spending.

Among nonmanufacturing companies, including those in the retail and service sectors, the largest group called for government measures to tackle declining birthrates and support childrearing, as well as steps to deal with rising prices of daily goods.

Ideas:

Yes, transformation doesn't happen overnight and or it takes time for companies to figure out just how to do what about it. Some might not want to change as with some major traditional Japanese companies and or they just don't have to funds or resources needed to make the changes even though they might want to do it.

The birthrate, like in South Korea, is the lowest in the OECD and doesn't look very promising. Childreasing, again like in South Korea, is a challenge and with young women or young married women citing challenges working and raising children not to mention the high cost of after school programs and so on. 

The price of daily goods is affecting all households which means their disposable income or extra income is being decreased each week or each month as prices continue to increase.

And now if you raising young children its even worse for them.

Have a nice day and be safe!