Japanese companies are paying more for employees these days. Problem is, the money is going toward social security payroll taxes instead of wages, adding to the frustrations of Bank of Japan policymakers seeking higher wages and stronger inflation.

While businesses haven't raised salaries much, their mandatory contributions to employees' social insurance programs have been rising for years, both in nominal terms and as a share of economic output.

Firms worry they will be made to carry an ever-larger share of the burden of paying for the nation's retirement and health care, as the population ages rapidly and the government struggles with the world's biggest debt burden. Throw in uncertainty about the nation's economic prospects, and you end up with a strong reluctance to raise wages or hire workers.