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Wage Increase Push Amid Labour Shortages in Japan’s SMEs
This year, small and medium-sized enterprises (SMEs) in Japan have increasingly felt the momentum to boost wages due to persistent labour shortages and inflationary pressures. Recent findings from a central bank survey highlight this trend, revealing that many SMEs now widely accept the need for ongoing wage hikes to address these challenges.
Despite grappling with the challenge of transferring rising labour costs to their product prices, there is a notable movement among these firms to initiate or contemplate price increases. The survey particularly underscores this trend in industries hardest hit by labour shortages.
Typically, wage growth in SMEs trails behind that of larger corporations. However, the current wage increase movement in these smaller firms could potentially lay the groundwork for another interest rate hike by the central bank.
The nation's largest union, Rengo, which represents approximately 7 million members, reports that worker's monthly salaries will see an average rise of 5.10% this fiscal year, marking the most significant wage hikes in the past three decades. Data from Rengo suggests that large companies with 300 or more union-represented employees have increased wages by 5.19%, while smaller firms have implemented a comparatively modest 4.45% rise in pay.
