Japan’s top companies are gearing up to offer their biggest wage increases in decades, but there’s no way Hideki Kawada can afford raises for the 18 employees at his printing firm. | AFP
That’s bad news for both Kishida and the central bank, which wants to wind down years of stimulus. The lack of broad wage growth illustrates Japan’s struggle to escape a deflationary spiral that has forced households and businesses to scrimp instead of spend.
“The companies that can hold out and offer lower prices, even temporarily, get the work,” he said. “Everyone’s losing money, so it’s just a case of enduring as long as you can until the other guys go out of business.” Small and mid-size firms account for 99 percent of the companies in Japan and almost 70 percent of employment, according to a 2016 government survey, the latest available.
“Their biggest worry is that customers will shift to another supplier. They feel they have no choice but to put up with impossible demands from big companies.”
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