The spring wage movement in Japan is underway, and looks set to bring higher wage increases than usual. The Japanese labor market resembles the American one more than the Swedish one.
In Sweden, most wages are determined by central agreements between large unions and employers, all of which relate to the wage setting of the export industries – the so-called mark.
Japan’s wage movement – a glimmer of light
But in Japan, wages are determined more atomized – broken down by company.
And much speaks for real wage increases. Over the past 10 years, the government in Tokyo has asked the business community for increased wage room to speed up consumption, which has not really been heeded.
Employers held tight to their wallets.
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Two extra monthly salaries
But in Japan, most employees have two extra monthly salaries during the year, which roughly corresponds to what we in Sweden receive as holiday pay.
And both of the two amounts were raised significantly last year and that meant increased purchasing power.
During the pandemic, the economy was severely strained worldwide and in Japan the two extra monthly salaries were deducted from many companies, to the dismay of the staff.
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70 percent of the companies are cheering
The growing purchasing power is one of the reasons why the Japanese stock market is doing so well. 70 percent of the large companies on the Tokyo Stock Exchange Nikkei are dependent on domestic consumption.
In the short term, Japan’s economy is holding strong, despite the setback of the last two quarters, when the country fell into a technical recession.
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Aging population
It tells Richard Nakamura at Gothenburg University.
– Japan has China as its largest trading partner. Next comes the United States. They try to strike a balance between both politically and economically. The Taiwan issue is taken a bit lightly, he says.
But there are other concerns on the horizon further ahead. A third of the country’s population is 65 or older.
– Despite several reforms, it is a growing problem. There have been attempts to introduce free childcare to increase childbearing, but it hasn’t really helped.
Tricks in other ways
However, efforts have been made to lift the economy in other ways.
– They are trying to get the elderly to work longer, and to get more women into the labor market, which has yielded results.
In Tokyo it is not noticed as much, because the young people are happy to move to the capital from the rest of the country. But in many other parts of Japan it is more or less depopulated.
Ghost towns – counties are shrinking
– If you travel around the country, you see ghost towns and ghost villages. One million leave the workforce every year and in some counties the population is shrinking by the equivalent of one Malmö per year. It is worrying.
It has long been difficult to move to Japan. The country has an incredibly restrictive immigration policy and becoming a citizen of Japan has historically been more or less impossible for foreigners.
More and more immigrants will save the economy
But it is being loosened up. Under the yoke of the demographic collapse, more and more labor immigrants have been allowed, who take their place mainly in the service sector, says Richard Nakamura.
– This mainly applies to unqualified labor, such as in the taxi industry, logistics and transport. Other service professions such as supermarkets, restaurants, the hotel industry and care for the elderly are also allowing more and more foreigners as a workforce, says Richard Nakamura.
The factories are moving out
In addition, Japan has another buffer. In order to avoid loss of production in important branches of industry, important factories have been moved abroad.
– Within ASEAN, there are free trade agreements with several other countries in Southeast Asia, and this makes it easier for companies to continue to maintain high profitability despite the aging of the Japanese population, concludes Richard Nakamura.
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