Record Wage Hikes in Japan: A New Era of Worker Empowerment

Japanese companies have agreed to a salary increase exceeding 5% for the second consecutive year, driven by a national consensus among policymakers, employers, and unions to help workers manage rising living costs amidst a backdrop of record corporate profits and labor shortages.

Japanese companies have agreed to increase wages by more than 5% for the second consecutive year, as announced by the country's largest union group, Rengo. This decision reflects a nationwide consensus that salary hikes are crucial to help workers manage soaring prices of necessities.

The argument for higher wages is bolstered by record-high corporate profits and the necessity to retain employees amid labor shortages, influenced by a weak yen. The 5.46% preliminary increase compared favorably with last year's initial figure of 5.28%.

However, final wage increase figures typically adjust downwards as agreements with smaller companies are factored in. Last year's final figure settled at 5.1%, marking a 33-year peak, despite revisions.

(With inputs from agencies.)