Photo/Illutration A staff member of the Aichi prefectural chapter of Rengo ((Japanese Trade Union Confederation) records wage hikes of member unions. (Kei Kobayashi)

Workers received their biggest wage hikes in 30 years, but the increases have not kept pace with inflation.

Rengo (Japanese Trade Union Confederation) on July 5 released the wage hikes of 5,463 member unions from this year’s spring offensive.

The average increase was 3.58 percent, up 1.51 percentage points over last year.

But real wages in April fell year-on-year for the 13th straight month, meaning the wage hikes were not enough to cover surging consumer prices caused in part by Russia’s invasion of Ukraine last year.

Takahide Kiuchi, executive economist at Nomura Research Institute, said that unlike the wage hike of 30 years ago, which was due to improved labor productivity, the main factor behind this year’s increase was higher consumer prices.

“There will be a need to heighten growth expectations by increasing the number of tourists and workers from abroad as well as encouraging companies to invest in plant and equipment to boost productivity,” Kiuchi said.

This year’s pay increases covered smaller companies as well because the Rengo study found that unions with fewer than 300 members were still able to record an average wage hike of 3.23 percent, the highest in 30 years.

The need to secure adequate personnel also led to a 5.01 percent increase in the wages of nonregular and part-time workers. That was the highest increase since 2015 when such a comparison was first possible.

But the average increase in base pay was 2.12 percent for the 3,186 Rengo unions that released their figures, less than the 3 percent increase in the consumer price index for fiscal 2022.

Related News