Photo/Illutration A Uniqlo store in Tokyo’s Shibuya Ward (Asahi Shimbun file photo)

Fast Retailing Co., operator of the Uniqlo clothing stores, said Jan. 11 it will raise the annual salaries of regular employees in Japan by up to 40 percent from March.

The increase is aimed at narrowing the wage gap with the company’s employees in the United States and Europe, who are generally paid more than their Japanese counterparts.

The pay hike is also intended to secure talented personnel at a time when various industries in Japan are plagued by labor shortages.

New hires will receive 300,000 yen ($2,300) in monthly pay from March, up from 255,000 yen, the company said.

Fast Retailing has around 8,400 regular employees in Japan.

A store manager will be paid 390,000 yen a month, up by 100,000 yen. An employee can be promoted to store manager a year or two after joining the company.

The company did not say what the average rate of increase for all employees would be.

It decides basic salaries on the basis of a pay structure consisting of about 20 grades that factor in the employees’ abilities and merits.

Fast Retailing said the salary increases will be the first across-the-board raises since the current pay system was introduced about 20 years ago.

It added that it increased hourly wages for about 41,000 part-time workers by 20 percent on average last fall.

It also said it will abolish special allowances for managerial positions, but regular employees’ annual pay, including bonuses, will increase overall.

The company posted a record net profit of 273.3 billion yen for the year ending in August 2022, up by about 1.6 times from the preceding year’s then record amount.