Japan Companies To Give The Lowest Pay Raise In Eight Years To Workers Due to Covid-19
In Japan, the Covid-19 pandemic has caused employees across sectors to receive the lowest pay raise in the last 8 years.
Former PM of Japan, Shinzo Abe had put together several stimulus policies that will be disregarded due to Covid-19. Japanese companies have decided to reduce their annual raises to the lowest in eight years and this decision has been taken in the light of Covid-19. Many companies have incurred big losses due to the pandemic last year that they are yet to fully recover. Firms have offered 2% raises or more so far.
The pandemic particularly served a blow to the service sector industry and workers have been facing the force of two decades of grinding deflation. Restaurants, hotels, transportation, and tourism have taken the biggest hits due to the lockdowns, hence these firms have been forced to prioritise job security above annual base pay increases. Reportedly, these wage talks serve as a parameter of corporate strength and household purchasing power, both of which are needed to generate sustainable economic growth and achieve the Central Bank’s 2% inflation target.
Many companies and labour unions have lowered or entirely forgone base pay hikes. Automobile Unions which have a widespread influence on wage talks have lowered or given up the demand for a base pay hike. Electric machinery unions too have lowered their base pay hike demand in comparison to last year. Even unions from industries like the Airline industry have shelved the demand for a base price hike this year.
The country had declared a state of emergency due to the rising cases of Covid-19 and the discovery of a new variant. The Tokyo prefecture is still said to be in a state of emergency till 21st March 2021. It seems that cases are still on the rise.
BREAKING NEWS: Tokyo confirmed 409 new cases of COVID-19 in the capital, the first time the daily number of infections has exceeded 400 since Feb. 18.
— The Japan News (@The_Japan_News) March 17, 2021
The Japanese exports too have seen a fall in the month of February.
Japanese exports fell much faster than expected in February as U.S. and China-bound shipments weakened, a source of concern for the world’s third-largest economy as it tries to prop up growth. @joinsumit gets you more details pic.twitter.com/sfnmd0bLDY
— WION (@WIONews) March 17, 2021
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