Listed Companies’ Average Pay Hits ¥6 Million Creating Even Larger Wage Gap

The average salaries for 2,591 listed Japanese companies rose 1.1% from the previous year to ¥6.06 million, based on the financial results for 2018. Tokyo Shōkō Research began its salaries survey in 2011, when it became required for listed companies to disclose compensation for executives and employees, and this is the first time that the average has broken through to the ¥6 million range. In the six years since Abe Shinzō returned to the position of prime minister at the end of 2012, average pay has risen by ¥361,000.

Meanwhile, in a National Tax Agency survey of all private companies, the most recent statistics for 2017 show that average salaries had increased from the previous year. Despite this, the figure for all companies remained at ¥4.32 million or ¥1.67 million lower than the ¥5.99 million for listed companies. This gap was ¥1.58 million in 2013, the first year of the Abe administration, so it is widening rather than closing.

Under Abenomics, a series of Abe administration economic policies, the Bank of Japan instituted monetary easing of a “different dimension” and lowered interest rates, while also providing substantial supply of funding. At the same time, the government implemented expansionary fiscal policy. If companies can increase their profits, it leads to a raise in salaries and creates a trickle-down effect of growing consumption. That effect can be seen among the employees of large companies, including listed ones; however other businesses are not benefiting.

Construction was top for listed company salaries by industry and the only one that reached into the ¥7 million range. This was due to active construction investment and securing of human resources. In second place was the real estate industry, which has been profiting due to rising land prices amid low interest rates. The finance and insurance industries tied for fourth place; however, falling interest rates mean that salaries have fallen year-on-year for two consecutive years.

The merger and acquisition advisor GCA was the highest ranking individual company for average annual pay with ¥20.63 million. Trading companies accounted for five of the top ten.

Listed Companies’ Average Annual Salaries in 2018

(Translated from Japanese. Banner photo © Pixta.)