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Datawatch

Pay in Japan increasingly stuck to floor as productivity lags

Data suggests companies offering minimum wage too inefficient to go higher

According to data released by the Organization for Economic Cooperation and Development, the minimum wage in Japan rose 20% in the past decade.

TOKYO -- Hourly earnings are showing an unusual pattern in Japan as rises in the minimum wage have left more people working near the pay floor despite a shortage of labor. The finding points to the existence of a congested segment of inefficient companies capable of paying their workers only at the lowest level.

Modest wage rises are often thought to improve productivity by spurring employers to boost efficiency in order to stay competitive. This argument will face an important test in Japan as to whether or not it is workable in this country.

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