After decades of stagnation, wages in Japan are finally rising

Kasahara yoshihisaoecdboj, boss of Higo Bank, a lender in Japan’s south, beams with pride as he explains plans to lift wages. The firm’s workers will see a 3% boost, as well as regular increases for seniority. But a sheepish look crosses his face when asked about the last time staff saw such a rise. “Twenty-eight years ago,” he admits.Higo Bank is no outlier. Annual nominal wages in Japan rose by just 4% from 1990 to 2019, compared with 145% in America, according to the , a rich-country club. Unions emphasise job stability over raises; bosses are reluctant to lift pay amid poor productivity growth. This has hampered efforts to escape deflation or low inflation. Thus the Bank of Japan () has maintained a doveish policy stance despite headline inflation topping 4% this year.