Uniqlo parent Fast Retailing Co gives jolt to Japan Inc with 40% wage hike

Uniqlo parent Fast Retailing Co Wednesday said it would raise wages by as much as 40 per cent, a clear sign that Japan’s rock-bottom salaries may be starting to budge after decades of deflation and cost-cutting.

The move by the firm is likely to heighten focus on worker pay ahead of annual spring labour negotiations. But it looks unlikely that the rest of Japan Inc will deliver increases on the same scale.

PM Fumio Kishida has repeatedly called for firms to increase wages, a plea that has gained urgency as prices have surged, leading to increases in the cost of everything from food to fuel.

The poor state of pay has become a problem for the world’s third-largest economy. In dollar terms, average annual pay in Japan was $39,711 in 2021, well below the OECD average of $51,607 and little changed from the early 1990s.

“Fast Retailing aside, there have been a number of companies that up to last year have significantly boosted their rate of pay increases. That’s a positive factor for the economy,” said Taro Saito, executive research fellow, NLI Research Institute.

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