Uniqlo owner, Fast Retailing Co, announced on Wednesday that it would increase the yearly pay for full-time workers in Japan by up to 40% in an effort to retain and inspire personnel as the nation deals with the fastest-pacing inflation in decades.
The fast fashion giant stated that the wage increases would impact new hires, store managers, and a larger group of employees.
The cost of everything from food to petrol has increased by amounts that were once inconceivable, prompting Prime Minister Fumio Kishida to repeatedly push businesses to raise wages.
Japan’s average wage is the lowest among the G7 countries, and the third-largest economy in the world has been stagnant for decades. The average annual wage in Japan was $39,711 in 2021, which is significantly less than the OECD average of $51,607 and not much different from the early 1990s.
According to Fast Retailing, “Going forward, the new remuneration of each employee will be decided by globally aligned grade criteria” based on performance and outcomes at work as well as an individual’s capacity to contribute to the company.
According to Fast Retailing, starting earnings for university graduates would climb from ￥255,000 to ￥300,000 (US$2,265) per month, while starting salaries for new store managers would increase from ￥290,000 to ￥390,000 per month.
The corporation also stated that it intended to raise annual compensation for other staff by up to 40%.
According to Tung, Fast Retailing’s spokeswoman, considering a prior hourly salary increase for part-time workers, the company’s overall personnel expenditures in Japan would increase by nearly 15% from the prior year. However, the cost would be covered by increased productivity.
The company’s action comes after numerous other similar moves by other Japanese corporations. According to local reports, Nippon Life Insurance will increase sales representative compensation by about 7%, increasing its personnel expenditures by ￥100 million while Suntory will hike pay by around 6 percent.
Local media revealed Brewers Asahi Group Holdings Ltd, Kirin Holdings Co, and Sapporo Holdings Ltd are also thinking about raising basic salaries.