A private think tank forecast Thursday that wages in Japan will increase 1.7 percent on average from year-before levels after the annual spring wage negotiations.

The projection is up slightly from last year’s actual average hike of 1.67 percent, the Institute of Labor Administration said in a report based on a poll covering management, unions and scholars.

The poll, conducted between December and January, drew responses from 349 officials in charge of labor affairs at major firms, labor union executives and intellectuals.

The institute said the wage hike outlook is “a little bit bright” on the back of Japan’s economic recovery.

The think tank expects an average monthly salary hike of 5,476 yen, up 128 yen from a year earlier. The management side forecast a hike of 5,459 yen, while the labor side projected an increase of 5,460 yen.

The poll found 60.8 percent of employers plan to offer a regular pay hike, while 74.6 percent of employees said management should do so.

But the percentage of employers who said their firms plan no annual wage hike rose 7 percentage points from a year earlier to 32 percent amid the increasing emergence of merit-based pay.

The percentage of firms with no plan to raise basic wage levels declined from 64 percent last year to 53.6 percent, while those eyeing a pay hike rose 8 percentage points to 15.5 percent.

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