"Inflation Allowances" Spreading in Japan

Economy

Tokyo, Dec. 9 (Jiji Press)--A growing number of Japanese companies are moving to pay "inflation allowances" to employees to help them cope better with surging prices of goods and services in the nation, while some others are opting to bring forward pay-scale hikes as a countermeasure.

The moves are intended to bolster the morale of employees at a time when inflation is outpacing wage growth to cause drops in real wages and add heavier burdens to their daily lives.

A labor ministry monthly survey showed Tuesday that the inflation-adjusted real wage index in October was down 2.6 pct from a year earlier, the biggest fall in seven years and four months, suggesting that soaring utility bills and food prices, blamed on higher resources prices and the yen's depreciation, canceled out growth in nominal wages.

For next year's "shunto" labor-management negotiations, the Japanese Trade Union Confederation, or Rengo, has set a policy of demanding pay hikes of around 5 pct in response to soaring prices.

Nojima Corp. <7419> is set to implement pay-scale hikes for some 3,000 employees including contract workers this month by moving up a salary revision it normally carries out every April. Specifically, the consumer electronics retailer will integrate the 10,000-yen monthly inflation allowance it started to pay in July in basic salary and add another 10,000 yen to the base wage.

[Copyright The Jiji Press, Ltd.]

Jiji Press