TOKYO (Reuters) – Willingness to raise wages has increased this year among Japan’s small and medium-sized businesses, reflecting labor shortages and efforts to help workers tackle inflation, a central bank survey showed on Friday.
According to a Bank of Japan survey of small and medium-sized businesses in the region, there is a sense that the labor shortage is here to stay and the need for continued wage increases is widely recognized.
While many companies still find it difficult to pass on rising labor costs in prices, there is a growing movement to implement or consider such price increases, particularly in sectors where labor shortages are severe, the research found.
Such dynamics among small and medium-sized businesses, where wage growth typically lags that of large companies, could provide the basis for another rate hike by the central bank.
According to the country’s largest union, Rengo, workers’ monthly wages will rise by an average of 5.10% this budget year, the largest wage increase in thirty years.
Rengo, which has about 7 million members, said large companies with 300 or more union-backed workers raised wages by 5.19%, while small companies raised wages by a smaller 4.45%.
(Reporting by Makiko Yamazaki; Editing by Kim Coghill and Miral Fahmy)