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.
by up to 40%, fuelling expectations big manufacturers will offer more at annual wage talks with unions this spring.
The cost of paper went up three times last year and his ability to raise prices is limited by competition. Some members of Tokyo Union, which represents around 600 workers mainly at small companies, will see "a little bit of a raise, if they really demand it," said deputy chairman Tatsuya Sekiguchi. They form the backbone of manufacturing, or "monozukuri", built on tiers of suppliers from tiny subcontractors up. Toyota Motor Corp has some 60,000 suppliers.
Small and medium-sized firms are passing on just 47% of higher costs to buyers, a September survey from the ministry of trade and industry showed. That was "not sufficient" and a sign suppliers were shouldering a lot of the burden, said ministry official Hiroyuki Sameshima. totalled $39,711 in 2021, well below the OECD average of $51,607 and little changed from the early 1990s. That's put pressure on household consumption, which accounts for more than half of Japan's economy.Real wages, which take into account inflation, have had their biggest hit in eight years.
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