COVID-19 Crisis Forces Many Japanese Companies to Put Wage Rises on HoldWork Economy
A survey conducted from late June to early July by Tokyo Shōkō Research, targeting 13,870 companies, found that 57.5% of the companies implemented or planned to implement a wage increase in fiscal 2020, a year-on-year decrease of 23.4 percentage points.
Over the past few years, the government has taken the initiative in calling for pay hikes from private companies, which has contributed to the proportion of firms raising wages exceeding 80%. But in the harsh economic climate of the COVID-19 crisis, this percentage has dropped dramatically. In fiscal 2020, 65.9% of large corporations (1,509 out of 2,290 companies surveyed) and 55.9% of small- and medium-sized companies (6,477 out of 11,580 companies) increased pay. Among companies that raised wages, 57.7% implemented an increase of 3% or less.
Tokyo Shōkō Research offers the following analysis of the situation: “As the time needed to bring the COVID-19 pandemic under control drags out, the reality is setting in that the winter bonus this year and wage increases the following year could be difficult to implement. The drop in disposable income is likely to cast a chill on the consumer mindset, setting off a negative spiral that worsens performance among the retail, wholesale, and manufacturing industries.”
(Translated from Japanese. Banner photo: © Pakutaso.)