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by May 22, 2024Featured Article, News

A survey of major Japanese firms showed they offered their highest monthly wage increases in 32 years at over 5 percent in the spring wage negotiations, as many sought to respond to elevated prices while trying to avoid brain drains, the country’s biggest business lobby said Monday.

The initial tally of wage increases showed an average 5.58 percent rise, the highest since comparable data became available in 1992 and equivalent to 19,480 yen per month, according to the Japan Business Federation, also known as Keidanren.

The government led by Prime Minister Fumio Kishida has been stepping up pressure on companies to offer pay hikes to bring a positive cycle of pay and price increases, as the country seeks to finally move out of its chronic deflation.

This year’s initial results are significantly higher than last year’s final tally, which showed a rise of 3.99 percent, or 13,362 yen, the biggest increases in 31 years at the time.

If the 5 percent-hike level is maintained until the final tally, it will be the first time since 1991, when the figure stood at 5.60 percent.

“The momentum of wage hikes has been growing since last year. We hope to ensure that this trend takes root,” an official at the business lobby said.

Management at many firms met their unions’ demands in full amid a deepening cost-of-living crisis and intensifying labor shortage across the country.

Toyota Motor Corp offered the biggest pay hike since 1999 while Nippon Steel Corp offered a bigger hike than its union had demanded.

Keidanren surveyed the lobby’s 244 member firms across 22 industries, and had substantial responses from 89 in 16 industries. The final tally for this year is expected to be released between late July and early August.

By industry, steelmakers saw the biggest increase with an average hike of 12.04 percent, followed by machine and metal makers at 6.85 percent and shipbuilders at 6.07 percent.

The average increase at manufacturers stood at 5.85 percent, while that of non-manufactures stood at 4.85 percent.

The overall results were in line with a separate survey conducted by the Japanese Trade Union Confederation, the country’s biggest labor union.

According to its most recent tally, the average pay hike at its member unions stood at 5.17 percent. The organization had set a goal of 5 percent or above for this year’s spring wage negotiations.