Uniqlo operator Fast Retailing Co. said Wednesday it will raise the annual salaries of its workers in Japan by up to 40 percent in March in an effort to narrow the remuneration gap with its employees overseas and increase the company's global competitiveness.
The casual clothing chain operator joins other large companies moving to hike wages amid public concern over prices continuing to rise and bite Japanese households' pocketbooks.
Due to the revision of its remuneration system covering its 8,400 full-time employees, Fast Retailing's domestic labor costs are expected to increase by around 15 percent."
Starting monthly salaries for university graduates will be increased to 300,000 yen ($2,300) from the current 255,000 yen, an annual pay hike of about 18 percent, the company said.
The monthly salaries of new store managers, who are typically first- or second-year employees, will be 390,000 yen, up 100,000 yen and an increase of around 36 percent annually. The annual earnings of other employees will also be increased by up to 40 percent, according to the company.
The Japanese government has urged companies to raise wages amid rising living costs, and the global clothing giant's move is expected to affect the annual "shunto" spring wage negotiations between management and labor across Japan.
Chief Cabinet Secretary Hirokazu Matsuno welcomed Fast Retailing's decision and said he hopes other companies will follow suit and raise wages "to the maximum extent."
"The best way to address the high commodity prices at the moment is to continuously raise wages to keep pace with rising prices," the top government spokesman said at a regular news conference.
Besides Fast Retailing, major camera manufacturer Canon Inc. is raising base pay for all of its employees by 7,000 yen this month. Major brewer Suntory Holdings Ltd. and Sumitomo Mitsui Financial Group Inc. are considering wage increases.
Fast Retailing employees' bonuses are also expected to rise based on the forthcoming changes. The company said it will scrap executive allowances and implement a common grading system for deciding employees' salaries.
The latest pay raise comes after the company increased its part-time workers' hourly wages in Japan by about 20 percent on average last September.
Fast Retailing posted a record net profit of 273.34 billion yen for the year that ended last August, up 60.9 percent from a year earlier, helped by robust overseas sales.
Operating profit was 297.33 billion yen on sales of 2.3 trillion yen. Both were record highs.
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