Japan's workers win biggest pay raises in 20 years

Nikkei -- Apr 17

Japanese workers appear headed for their biggest wage increase in two decades as companies led by the logistics and retail sectors compete for a slice of the country's ever-shrinking workforce.

Businesses lifted wages by an average of 2.41% this year, according to data collected by Nikkei as of April 3. This raise -- made up of base pay and automatic, seniority-based pay -- topped last year's average increase by 0.35 percentage point, the first such growth in three years.

In value terms, monthly pay rose by an average of 7,527 yen ($70), also the highest since 1998.

Rising wages in Japan usually are driven by manufacturers. But nonmanufacturers have taken the lead this year for the first time since 1997. They increased pay by 2.79%, their biggest hike in 21 years and more than half a point above the raises from manufacturers.

Logistics providers and service industry players in particular are working harder to attract employees. Yamato Transport agreed to the full 11,000-yen increase in monthly base pay, or 3.64%, requested by the Yamato Holdings unit's labor union during annual wage negotiations.

The logistics sector enacted an average pay raise of 3.39%, the highest across all industries and the only one with an average increase exceeding 10,000 yen. The industry is struggling to keep pace with the surge in demand for e-commerce shipments.

A Life Corp. supermarket in central Tokyo. The grocery chain will raise wages for both full-time and part-time workers. (Photo by Takuya Imai)

Department stores and supermarkets raised wages by 2.53%. Grocery store chain Life Corp. will raise salaries for full-time employees by 3.86%, while also pledging to increase wages for part-time workers.

Manufacturers boosted pay by 2.27%, just 0.18 point more than in 2017. Toyota Motor, which likely posted a record net profit for the fiscal year ended in March, has agreed to a 3.3% pay raise but is not releasing specific yen figures.