The textile multinational Fast Retailing (TYO:9983The owner of clothing store chain Uniqlo announced Wednesday that it plans to increase the annual wages of its workers in Japan by up to 40 percent in order to reduce the wage gap with its overseas employees.
Monthly salaries for university graduates will increase from 255,000 yen (1,790 euros) to 300,000 yen (2,110 euros), representing an annual salary increase of about 18 percent, the company said.
In the case of store managers, this increase will be from 390,000 yen (2,744 euros) to 490,000 yen (3,447 euros), or 36% per year, while the salaries of other employees will increase by up to 40%, the company said.
This overhaul of its salary system covers its 8,400 full-time employees and the clothing chain’s labour costs are expected to increase by about 15%.
“Especially in Japan, where remuneration levels have remained low, the company is significantly increasing the remuneration table to compensate individual employees based on their growth, ambition and ability to contribute to the business,” the company said in a statement released today.
Government spokesman Hirokazu Matsuno welcomed the decision after the Japanese government urged companies to raise workers’ wages amid a rise in the cost of living in the world’s third-largest economy.
“We want to assess this decision and, although it is an agreement between the companies and their workers, we hope that there will be the largest possible increase,” Matsuno said today at a press conference and added that it is the “best remedy against the rise in prices.”
Special payments for Fast Retailing employees are also expected to increase in the future.
The textile multinational obtained a net profit of 273,335 million yen (1,919 million euros) in the past year, from September 2021 to August 2022, which is 60.9% more and a record figure.
Japanese Prime Minister Fumio Kishida has been urging the private sector to apply wage increases since his arrival in office in October 2021, with a view to achieving the long-awaited virtuous circle of inflation, wage increases and economic growth.
The Japan Confederation of Trade Unions, known as Rengo, aims to agree to a general wage increase of 5% during annual negotiations with employers’ organizations planned for the coming months.