30% of Japan firms OK with raising pay

30% of Japan firms OK with raising pay

JAPAN - About 30 per cent of listed companies that are reporting positive earnings are willing to raise wages, according to a Yomiuri Shimbun survey.

Companies have been releasing their latest financial results in recent days, with many seeing improvement thanks to the yen's depreciation and other tailwinds brought about by Abenomics. Up through Friday-which saw the most companies announcing results so far-The Yomiuri Shimbun has asked 105 companies listed on the Tokyo Stock Exchange about possible pay increases at the press conferences held to announce their earnings reports. Of these firms, 33 said they were willing to raise wages.

Of the 33 firms, eight companies, or 7.6 per cent, said they were positive about a uniform pay-scale increase of their employees' monthly base salaries.

On Friday, 388 of the listed companies released their interim consolidated settlements of accounts for the first half for fiscal 2013. Of the 2,367 listed companies, 1,799 firms, or 76 per cent, have made earnings announcements.

Mitsubishi Motors Corp., which posted healthy earnings, is among those that expressed a positive stance toward a uniform pay-scale increase. Although Komatsu Ltd. reported drops in its operating sales and profit, the company was positive about wage increases due to its favourable outlook for the future.

"Our business performance will definitely be on a recovery track," a Komatsu official said.

An official of Kawasaki Heavy Industries, Ltd. said, "The right conditions are developing to [realise a uniform pay-scale increase]."

Fifty-four companies, or 51.4 per cent, said they had no plans to increase wages or are undecided. Of this number, Kawasaki and many other firms may actually implement a uniform pay-scale increase, the inquiry found.

Since the beginning of the 21st century, a growing number companies have shifted to a system in which they reward their employees with lump-sum payments, such as bonuses, rather than uniform pay-scale increases that would continually raise personnel expenses.

According to the latest inquiry by The Yomiuri Shimbun, 25 companies said they were planning to increase wages by granting bonuses.

According to a survey released by the Japan Business Federation (Keidanren) in November 2012, eight of their 193 member companies and other organisations, or 4.1 per cent, increased wages through a uniform pay-scale increase in the first half of 2012.

However, the average pay raise of labour union members remained at a tiny ¥74 (S$0.93).

As shunto spring labour negotiations will not go into high gear until about February, the labour unions of individual companies have yet to come up with concrete demands.

The latest inquiry by The Yomiuri Shimbun found that, in a rare move, the managements of several companies have already expressed their intention to carry out a uniform pay-scale increase.

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