32% of small, medium-sized businesses in Japan 'can't' or 'won't' hike wages soon: survey

TOKYO -- Thirty-two percent of small- and medium-sized businesses in Japan "will not" or "cannot" implement wage hikes anytime soon despite Prime Minister Fumio Kishida's call for increases, a recent survey conducted by an insurance firm has revealed.

Daido Life Insurance Co. on Jan. 26 announced the results of its survey targeting the managers of some 9,000 small- and medium-sized companies nationwide. Although raising wages is a cherished policy of the Kishida administration, the survey indicated that many businesses are unable to do so as they are suffering from rising procurement costs due to the historical weak yen and high commodity prices.

The survey was conducted in December 2022. Thirty-four percent of the respondents answered that they "plan to raise wages (including those who have already done so)." In contrast, 18% said they "will not implement" wage hikes, while 14% said they "intend to raise wages but are unable to do so."

When asked about the specific rate of wage increases, "2% or higher but less than 3%" accounted for the largest percentage, at 28%, followed by "less than 2%" at 25%. The most common reason given for not being able to raise wages, with multiple answers allowed, was that "the economic outlook is uncertain," at 69%. By industry, 42% of the respondents in the manufacturing industry expressed their intention to raise wages, while only 23% of the respondents in the retail industry did so.

By size, 55% of companies with 21 or more employees responded that they "intend to raise wages," while only 20% of businesses with five or fewer employees said so.

(Japanese original by Daisuke Oka, Business News Department)