Companies are offering their lowest wage increases in eight years as labor talks wrap up on Wednesday, in a sign the COVID-19 pandemic is putting an end to the benefits brought on by former Prime Minister Shinzo Abe's stimulus policies.
Over the past seven years, major firms have offered pay rises of 2% or more in annual shuntо̄ spring wage negotiations, in a nod to government efforts to eradicate two decades of grinding deflation. Abe's policies, dubbed Abenomics, targeted wages among other reforms to help reflate the economy.
The country's chronic labor shortage from a rapidly graying population also prodded companies to offer higher salaries to lure talent.