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Can Japanese Workers Finally Expect Fatter Paychecks?

by JPN-Journal.com Editors
July 7, 2007

Japan's companies were on a massive cost-cutting campaign during the past decade to cope with the country's long economic downturn. Even as the economy grew these past five years, the companies held down wage bills by skimping on bonus payments and hiring temporary workers for lower pay and fewer benefits.

Maybe not so anymore.

Backed by exports of Japan's core manufacturing products boom, big corporations are taking on more workers. Japan's unemployment rate fell to 3.8% in May, falling below 4% for the first time in nine years, and stayed at that level in June, according to data released by the Ministry of Health, Labour and Welfare.

As Japan's unemployment rate continues to mark record low, economists say a key level for unemployment is 3.5%. Should the jobless rate sink below this point, companies overall would have to raise wages in order to attract and retain employees, Wall Street Journal reported Friday.

Even so, corporate Japan's thirst for more workers isn't slowing down.

Sharp Corp., one of the world's top manufacturers of liquid-crystal displays and solar-powered batteries, now plans to hire 1,000 college and high-school graduates in spring 2008, a hiring target up 60% from this year and the highest since 1992.

Chubu Electric Power Co., a utility that supplies electricity to the booming industrial area around Nagoya, the home of Toyota Motor Corp., will hire 500 graduates next spring, more than five times its number of hires in the year ended in March 2005.

Can diligent hard-working Japanese workers finally expect fatter paychecks?