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Small Business Wage Increase Survey Results in Japan

In a recent investigation conducted by the Forval GDX Research Institute, insights into small business management practices in Japan were revealed, especially concerning salary hikes. As part of their ongoing assessment, this survey embodied efforts to explore the real-life impacts of government policies like wage increase support on smaller enterprises.

Background of the Survey

The study, termed the "Second Small Business Management Reality Survey for 2025," took place from September 16 to October 17, 2025. Given the backdrop of pressing economic discussions around wage adjustments led by RENGO (Japanese Trade Union Confederation), stakeholders were eager to understand how these policies resonate with the ground realities faced by small business owners.

Government initiatives have been structured to ease wage increases through an array of financial aids including subsidies, grants, and promotional tax measures. As of November 28, 2025, during a Central Committee meeting, RENGO officially set the goal for the 2026 Spring Labor Negotiations (Shunto) to demand a salary increase of 6% or more. But how reflective is this goal in actual implementations? The survey sought to unravel this disconnect.

Survey Findings

The results highlighted three crucial observations regarding the wage increase landscape:

1. Mismatch Between Expected and Actual Increases: A significant finding was that a majority of the surveyed companies reported actual wage increases of below 4%, contradicting the 6% target set by RENGO. This stark contrast indicates a substantial gap between policy targets and operational realities within small businesses.

2. Perception of Wage Increases: Around half of the business owners surveyed expressed that they view wage hikes as an "increase in costs" rather than a stimulus to economic activity. Therefore, there's a pressing need to shift the narrative around wage increases from a financial burden to a substantial contributor to economic growth.

3. Low Awareness of Government Support: Shockingly, close to 50% of the respondents were unaware of government supports available for wage increases. This underscores the necessity for enhanced communication and education from administrative bodies to ensure that small businesses can access and utilize existing support effectively.

Methodology Overview

Conducted by the Forval GDX Research Institute, the survey engaged a wide spectrum of small business owners across Japan, yielding 1,464 valid responses. The collection of responses was managed through an online questionnaire, allowing for comprehensive analysis.

The survey also probed specific segments, such as the percentage increase experienced by businesses that have enacted salary hikes. Approximately 55.7% of respondents reported increases below 4%, indicating a concerning trend that challenges the efficacy of current economic support measures.

When considering various sectors, manufacturing and construction companies demonstrated slightly higher wage increments compared to other industries. 65.8% of manufacturing firms instituted raises within the 1% to 4% range, with construction closely trailing at 54.2%. This trend highlights that despite ongoing pressures like rising materials costs and stricter labor regulations, certain sectors are managing to respond to wage increase standards better than others.

Conclusion and Recommendations

The complexities surrounding small businesses' wage increase capabilities reflect greater issues within the economic framework of Japan. Constructing an environment conducive to sustainable profitability must occur alongside marketing government support effectively.

To address these challenges, strategies such as revising contracts for better continuity in wage increases, along with persistent government and agency support, must be prioritized. Thus, fostering a business environment that not only lifts wages but also contributes positively to the economy overall remains imperative. This ongoing discourse around wage increases should transition into a viable economic strategy for small enterprises moving forward.

About Forval GDX Research Institute

The Forval GDX Research Institute operates with a mission to explore and articulate the transformation of small businesses through Green and Digital methodologies (GDX). The Institute emphasizes that fostering small business growth is essential for the broader economy, advocating for enhanced research and support for Japan's small enterprises.

For more information, visit GDX Research.