Wages have barely risen in Japan since the asset bubble burst in the 1990s but have crept up recently, as companies face pressure to compensate employees for the rising cost of living.
Importantly, smaller firms are also starting to raise pay even as many of them face a margin crunch. A durable rise in wages is an important consideration for policymakers who seek to foster sustainable demand-driven inflation in the world's third-largest economy before starting to unwind monetary stimulus.
"Customers have returned to pre-pandemic levels. Moreover, we want to give staff a sense of security in the face of rising living costs," Yu Ito, spokesperson at the park operator's president office, told Reuters.Nearly 60% of Japan's small and medium enterprises plan to lift wages this year with about 20% aiming for a hike by 4% or more, a survey by the Japan Chamber of Commerce and Industry showed in March.
Bank of Japan officials have said the outcome of small firms' wage talks, which will get into full swing towards June, will be key to whether Japan will see durable pay hikes to enable it to phase out its massive monetary stimulus. The jobless rate remained tight at a three-decade low of 2.3% on average in 2023, according to data by the International Monetary Fund .
"Medium-to-long term inflation expectations and ability to pass on costs to bigger firms at higher end of the supply chain are important factors for SMEs to raise wages," Yamada said.
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