MNI BRIEF: BOJ Sees Mild Wage Hikes, Broad-Based Hikes Needed

A board-based rise in wages is needed, including for part-time jobs and among small businesses, in order for wage increases to gain traction at an economy-wide level, the Bank of Japan’s full text Outlook Report released Thursday said.

It is projected in this Outlook Report that wage growth will accelerate gradually, albeit at a moderate pace, it said. “Starting with wages of part-time employees, the growth rate is expected to accelerate clearly, reflecting a tightening of labor market conditions,” the report said.

“Wages of part-time employees are likely to increase to a greater extent than before, since labor market conditions are expected to tighten from both the demand and supply sides and hence labor shortages are projected to intensify,” it said.

The report also said labor market conditions at major firms have had no statistically significant impact on wages but a tightening of labor market conditions at smaller firms has tended to push up wages.

“It is necessary to pay close attention to the extent to which recent price rises will be reflected in wages through the labor-management wage negotiations,” the report said.