The government is likely to establish 1% growth in real wages as its first-ever official target for pay increases — a move that comes as prolonged inflation continues to exert a drag on domestic demand.
The government will set a goal of reaching 1% annual gains in real wages by the fiscal year starting in April 2029, according to a policy draft by Prime Minister Shigeru Ishiba’s new capitalism panel released Wednesday. The goal is based on the premise that stable and sustainable 2% inflation is in place.
"Wage increases are at the very heart of our growth strategy,” Ishiba said after the panel meeting. "We will mobilize all available policy resources to support management transformation and create an environment conducive to wage increases, particularly for small and midsize businesses, which account for 70% of employment in our country.”
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