Companies that raise wages aggressively are outperforming their frugal peers on the Tokyo stock market as payslips become a yardstick for success in post-deflationary Japan.
While forking out more money to attract and retain talent is a normal business practice in most places, it marks a shift in Japan, where salaries grew at a glacial pace and workers put job security ahead of a raise after the nation’s economic bubble burst in the early 1990s.
Now as the working age population shrinks rapidly, and inflation eats into household budgets, employers and workers are changing their behavior — with big implications for investors.