Uniqlo owner jolts Japan with 40% wage hike

STORY: Uniqlo-owner Fast Retailing just gave the Japanese business world a jolt.

On Wednesday (January 11) it said it would raise wages by up to 40%.

Analysts say that’s a clear sign that Japan’s rock-bottom salaries are starting to budge after decades of deflation and cost-cutting.

The move is likely to heighten the focus on pay ahead of annual spring labor negotiations.

Though it's unclear whether other big firms are about to follow suit.

The poor state of pay has become a political issue in the world’s third largest economy.

Japan’s average annual wage stood at just under $40,000 in 2021.

That’s well below the OECD average of over $51,000.

It’s also little changed from the early 1990s.

Fast Retailing says it’s the first time in at least 20 years that it’s revised pay right across the group.

The firm says the move is intended to make its pay and working style more globally competitive.

Analysts say it’s probably also driven by inflation and the problems caused by Japan’s shrinking labor pool.

Among the country’s other big firms, drinks maker Suntory says it’s looking at wage increases of more than 6%.

Honda Motor has said it wants to tackle pay increases “aggressively”.