Wage turnaround in Japan?: Fashion giant raises salaries by up to 40 percent

Wage turnaround in Japan?
Fashion giant increases salaries by up to 40 percent

Wages in Japan have changed little since the early 1990s. Apparently, this will be the end of the future: the parent company of the fashion giant Uniqlo has announced a huge salary increase. Not only the employees are happy about this.

The operating group of the Japanese fashion giant Uniqlo is making headlines with a strong salary increase for its employees in Japan. The company announced that the salaries would be increased by up to 40 percent in March, which also sparked joy in the government. Government spokesman Hirokazu Matsuno said he hopes other companies will follow suit and raise wages “to the maximum”.

Fast retailing 570.00

With the salary increase, the Fast Retailing group says it wants to reduce the wage gap between its employees abroad and increase the company’s global competitiveness. In view of the rapid aging of Japanese society as a result of low birth rates, there is already an acute shortage of workers in some sectors.

The monthly starting salaries for university graduates will be raised from the current 255,000 to 300,000 yen (around 2100 euros) at the group. The monthly salary of new store managers will be 390,000 yen, up 100,000 yen. According to the information, the annual earnings of other employees will also be increased by up to 40 percent.

Wages and salaries have stagnated for years

According to experts, this should accelerate wage increases for young and talented workers. Fast Retailing put the future increase in personnel costs at 15 percent. However, not all companies could afford such increases. In Japan, wages have grown little since the early 1990s, averaging $39,711 annually in 2021. The average of all OECD countries is 51,607 US dollars. Against the background of rising inflation, Japanese Prime Minister Fumio Kishida had repeatedly appealed to the economy to raise wages and salaries.

The company, which operates more than 3,500 clothing stores worldwide, plans to present its quarterly results tomorrow, Thursday. In October, she announced record profits for the 2021/2022 financial year. The shares of the fashion group rose by 1.4 percent in Tokyo. “In addition to Fast Retailing, other companies have recently raised wages significantly,” said analyst Taro Saito from the NLI Research Institute. “This is positive for the Japanese economy.”

The Japanese government has asked companies to increase wages because of the rising cost of living. The move by the global apparel giant is expected to affect the spring’s annual wage negotiations (Shunto) between employers and employees across Japan.

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