TOKYO: Uniqlo parent Fast Retailing Co Ltd on Wednesday said it would raise wages by as much as 40%, in a high-profile sign that Japan's rock-bottom salaries may be starting to budge after decades of deflation and cost-cutting.
The move by the casual clothing giant is likely to heighten focus on worker pay ahead of annual spring labour negotiations, although it looks unlikely that the rest of Japan Inc will deliver increases on the same scale.
Prime Minister Fumio Kishida has repeatedly called for companies to increase wages, a plea that has gained urgency as prices have surged, leading to once-unthinkable increases in the cost of everything from food to fuel.
The poor state of pay has become arguably the greatest 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 Japanese economy," said Taro Saito, executive research fellow at NLI Research Institute.
Still, he cautioned that Fast Retailing's case was that of one company with the wherewithal to afford sharp increases, which wasn't true of many other Japanese companies.
Fast Retailing's move marked the first time in at least 20 years that the company, which operates more than 3,500 clothing stores worldwide, would revise remuneration across its entire group, said spokesperson Pei Chi Tung.
The change was aimed at making the company's work style and remuneration more globally competitive, she said, adding that there was an "urgent need" to raise pay in Japan, where it has remained low compared with overseas operations.
From March, new graduate employees would be paid 300,000 yen ($2,300) a month, compared with 255,000 yen now, representing an annual increase of around 18%, the company said. New store managers will see an increase of around 36%, to 390,000 yen a month, it said.
PRICE HIKES
The wage announcement comes a year after the company said it would have to raise prices for some products due to higher costs for materials and shipping. This year it increased the price of fleece goods and down jackets in its autumn-winter product lines, in what was seen as something of a turning point for consumers.
Uniqlo's ability to meet Japanese consumers' zealous demand for both relatively high quality and low prices has made it known for its "cosupa" - cost performance - turning the maker of 2,990 yen fleece jackets and 3,990 yen selvedge jeans into a global retailer and making founder Tadashi Yanai Japan's richest man.
But, like other Japanese companies, it is also grappling with a shrinking labour pool at home.
"We believe this is probably down to inflation and Japan's tight labour market," said Oshadhi Kumarsasiri, an analyst at Lightstream Research, in a note on the Smartkarma platform.
"In addition, the company's aggressive expansion plans in markets such as the U.S. and Europe would mean that they will need to deploy some of the trained senior staff from Japan into those markets."
Overall personnel costs in Japan would rise about 15% from the previous year, taking into account a previous hourly wage hike for part-time workers, with the expense absorbed by productivity improvement, Tung, the spokesperson, said.
Drinks maker Suntory Holdings has said it was looking at raising wages more than 6%, while Honda Motor Co Ltd (7267.T) has said it wants to tackle wage increases "aggressively".
The question is whether overall increases will be enough to compensate for recent spikes in food and other consumption items.
"We welcome reports of companies that have announced aggressive wage hike policies," Hirokazu Matsuno, the government's top spokesperson, told a news conference.
"We believe that the best way to address the current increase in prices is to realise continuous increases in wages."
Fast Retailing is due to post first-quarter earnings on Thursday. It reported record profit for the year through to August, as growth in North America and Europe compensated for a slump in its largest overseas market, China, which had been slowed by pandemic containment measures.
The company's share price rose 1.4% in Tokyo trade, versus a 1% advance in the benchmark Nikkei (.N225) index.
($1 = 132.4400 yen)
Reuters
Wed Jan 11 2023
![Uniqlo owner gives Japan Inc a jolt with 40% wage hike Uniqlo owner gives Japan Inc a jolt with 40% wage hike](https://resizer-awani.eco.astro.com.my/tr:w-177,h-100,q-100,f-auto/https://img.astroawani.com/2023-01/61673419574_uniqlo.jpg)
People shop at a UNIQLO store during the grand opening of the The Hudson Yards development, a residential, commercial, and retail space on Manhattan's West side in New York City, New York, U.S., March 15, 2019. REUTERS/Brendan McDermid
![Ekonomi China teruskan momentum pemulihan Ekonomi China teruskan momentum pemulihan](https://resizer-awani.eco.astro.com.my/tr:w-177,h-100,q-100,f-auto/https://img.astroawani.com/2023-01/71674060668_ChinaPopulation.jpg)
Ekonomi China teruskan momentum pemulihan
Ekonomi China meneruskan momentum pemulihan dan trend perkembangan ke arah baik dengan operasinya kekal stabil secara keseluruhannya pada separuh pertama tahun ini.
![PPZ-MAIWP catat RM511 juta kutipan zakat tahun ini, naik 10 peratus PPZ-MAIWP catat RM511 juta kutipan zakat tahun ini, naik 10 peratus](https://resizer-awani.eco.astro.com.my/tr:w-177,h-100,q-100,f-auto/https://img.astroawani.com/2024-04/61714481430_TBNAIM.jpg)
PPZ-MAIWP catat RM511 juta kutipan zakat tahun ini, naik 10 peratus
PPZ-MAIWP mencatat kutipan zakat sebanyak RM511 juta dari Januari hingga Jun tahun ini dengan peningkatan sebanyak 10 peratus berbanding tempoh sama pada 2023.
![Empat terbunuh, puluhan cedera dalam protes antikuota di Bangladesh Empat terbunuh, puluhan cedera dalam protes antikuota di Bangladesh](https://resizer-awani.eco.astro.com.my/tr:w-177,h-100,q-100,f-auto/https://img.astroawani.com/2024-07/71721144143_TBBANGLADESHCAMPUS.jpg)
Empat terbunuh, puluhan cedera dalam protes antikuota di Bangladesh
Abu Sayeed, seorang daripada penyelaras dan pelajar di Universiti Begum Rokeya di Rangpur utara, terbunuh semasa pertempuran dengan polis.
![Misi ekonomi produk agrikomoditi ke India perkukuh hubungan dua hala Misi ekonomi produk agrikomoditi ke India perkukuh hubungan dua hala](https://resizer-awani.eco.astro.com.my/tr:w-177,h-100,q-100,f-auto/https://img.astroawani.com/2024-07/61721130378_JohariAbdulGhani.jpg)
Misi ekonomi produk agrikomoditi ke India perkukuh hubungan dua hala
KPK akan mengadakan Misi Ekonomi Produk Agrikomoditi Malaysia ke India pada 17-18 Julai ini.
![Golongan belia pemacu penting bentuk masa depan industri pembuatan Malaysia - FMM Golongan belia pemacu penting bentuk masa depan industri pembuatan Malaysia - FMM](https://resizer-awani.eco.astro.com.my/tr:w-177,h-100,q-100,f-auto/https://img.astroawani.com/2024-05/41715247870_SohThianLaijpg.jpg)
Golongan belia pemacu penting bentuk masa depan industri pembuatan Malaysia - FMM
Pemimpin perniagaan dan usahawan daripada golongan belia merupakan pemacu penting yang akan membentuk masa depan industri pembuatan Malaysia, kata Presiden Persekutuan Pekilang-Pekilang Malaysia.
AWANI Tonight: 16 July 2024
#AWANITonight with @Hafiz_Marzukhi
1. Govt mulls amending Penal Code to deal with cyberbullying
2. England's Southgate resigns after Euro 2024 Final defeat
#AWANIEnglish #AWANINews
1. Govt mulls amending Penal Code to deal with cyberbullying
2. England's Southgate resigns after Euro 2024 Final defeat
#AWANIEnglish #AWANINews
![9,241 pelajar Palestin terbunuh dalam serangan Israel sejak 7 Oktober 9,241 pelajar Palestin terbunuh dalam serangan Israel sejak 7 Oktober](https://resizer-awani.eco.astro.com.my/tr:w-177,h-100,q-100,f-auto/https://img.astroawani.com/2024-06/81718630490_Smokerises.jpg)
9,241 pelajar Palestin terbunuh dalam serangan Israel sejak 7 Oktober
9,318 pelajar terbunuh dan 14,671 lagi cedera di Semenanjung Gaza manakala di Tebing Barat, 103 pelajar terbunuh dan 505 lagi cedera.
![Penumpang Singapore Airlines meningkat hampir 14 peratus pada Jun Penumpang Singapore Airlines meningkat hampir 14 peratus pada Jun](https://resizer-awani.eco.astro.com.my/tr:w-177,h-100,q-100,f-auto/https://img.astroawani.com/2024-07/61721142800_AirbusA.jpg)
Penumpang Singapore Airlines meningkat hampir 14 peratus pada Jun
Rangkaian penumpang Kumpulan SIA meliputi 125 destinasi setakat Jun dan rangkaian kargo terdiri daripada 129 destinasi.
![Empat individu termasuk pasangan pempengaruh bebas tahanan reman Empat individu termasuk pasangan pempengaruh bebas tahanan reman](https://resizer-awani.eco.astro.com.my/tr:w-177,h-100,q-100,f-auto/https://img.astroawani.com/2024-05/41716613114_TBsprm.jpg)
Empat individu termasuk pasangan pempengaruh bebas tahanan reman
Kesemua individu juga perlu hadir ke pejabat Suruhanjaya Pencegahan Rasuah Malaysia (SPRM) sebulan sekali untuk melaporkan diri.
![KPT alu-alukan syor PAC guna garis panduan pelaburan universiti awam untuk anak syarikat KPT alu-alukan syor PAC guna garis panduan pelaburan universiti awam untuk anak syarikat](https://resizer-awani.eco.astro.com.my/tr:w-177,h-100,q-100,f-auto/https://img.astroawani.com/2024-07/81719822088_ZambryAbdKadir.jpg)
KPT alu-alukan syor PAC guna garis panduan pelaburan universiti awam untuk anak syarikat
KPT mengalu-alukan cadangan PAC berhubung pelaksanaan dan pemakaian Garis Panduan Pelaburan dan Pembiayaan oleh Universiti Awam 2024, kepada anak-anak syarikat di bawah seliaan kementerian itu.
![Laman sesawang Uniqlo, GU Jepun digodam, maklumat peribadi lebih 460,000 pelanggan bocor Laman sesawang Uniqlo, GU Jepun digodam, maklumat peribadi lebih 460,000 pelanggan bocor](https://resizer-awani.eco.astro.com.my/tr:w-177,h-100,q-100,f-auto/http://img.astroawani.com/2019-05/81557849847_TBUniqlo.jpg)
Laman sesawang Uniqlo, GU Jepun digodam, maklumat peribadi lebih 460,000 pelanggan bocor
Kedua-dua laman sesawang beli-belah telah digodam antara 23 April dan 10 Mei, dan data pengguna termasuk nama, alamat, nombor telefon serta maklumat kad kredit mungkin telah dibocorkan.