Japan's smaller companies gain leeway to raise pay on steady profits

With slower growth in labor costs, wage hikes poised to spread to more industries

Wage increases at small and midsize businesses, which employ the majority of Japanese workers, are considered key to lifting the economy as a whole. (Photo by Arisa Moriyama)

YOHEI HIROSE, Nikkei staff writer

March 5, 2024 04:15 JST

TOKYO -- Japan's small and midsize businesses have growing room to raise wages, official data published Monday suggests, stoking hopes of hikes across a wider range of companies this year.

Labor's share of value added at nonfinancial small and midsize enterprises came to 70.7% for the four quarters ended December, down 1.4 percentage points from a year earlier. The figures reflect the moving average based on Nikkei's calculations using quarterly corporate performance data released by the Ministry of Finance.