Fast Retailing, the Japanese giant that owns popular clothing brands Uniqlo and Theory, will start paying its employees much more this year.
The company announced Wednesday that it would raise wages in Japan by up to 40%, acknowledging that “pay levels have remained low” in the country in recent years.
“This will include employees from headquarters and corporate departments responsible for the company’s global headquarters functions, as well as employees working in stores,” the company said in a statement.
The move comes just days after Japanese Prime Minister Fumio Kishida urged business leaders to accelerate raises for workers, warning that the economy risks slipping into stagflation if wage increases continue to lag behind price rises.
Japan is facing the biggest drop in living standards in nearly a decade.
Last Friday, the world’s third-largest economy reported its worst real wage decline in more than eight years, worsening conditions for workers already struggling with higher living costs.
In the capital Tokyo, core inflation, which measures items that exclude in natura foods, rose 4% in December compared with the previous year, above the 3.8% expected by economists, according to official data released on Tuesday.
That was “the highest in 40 years,” analysts at Nomura said in a report on Wednesday.
“Inflation in Japan is a factor in our considerations,” a Fast Retailing spokesperson told CNN on Wednesday.
But the company is generally more focused on aligning “each employee’s compensation with global standards, so that we can increase our competitiveness,” the representative added.
The company will officially adjust its overall compensation system in March. Starting salaries for entry-level college graduates will increase by about 18%, while new store managers could see an increase of approximately 36%, according to the company.
The retailer has also increased pay for employees in some of its overseas markets, leading to pay increases ranging from 5% to 25%, the spokesperson said.
Source: CNN Brasil
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