Japan’s Shrinking Workforce Has Positive Consequences

As Japan tallies the results of wage talks between companies and labor unions, the salarymen who fill the ranks of the nation’s largest enterprises can thank one of the country’s biggest weaknesses for their pay rise. At least in part.

The shrinking pool of workers in the world’s most aged society is having a strong impact on salaries, along with some signs of an economic pickup and hopes for rising prices, according to Morgan Stanley.

“We expect that wages in Japan will continue to rise mainly by market forces of supply and demand, not by pressure from the government urging companies to raise pay,” Takeshi Yamaguchi, an analyst at Morgan Stanley MUFG in Tokyo, wrote in a note.


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