Japan Labor Productivity Up 0.2 Pct in FY 2024

Tokyo, Nov. 16 (Jiji Press)–Japanese labor productivity per worker in fiscal 2024, which ended in March this year, rose 0.2 pct from the previous year in inflation-adjusted real terms, up for four consecutive years, Japan Productivity Center data have shown. However, labor productivity “needs to increase more than 1 pct” to ensure that real wages keep rising by 1 pct as envisioned in a government target, an analyst at the think tank said. Labor productivity, or the amount of added value created by labor, improved in the sectors of transport and postal services, finance and insurance, and information and communications. The improvement reflected streamlining measures related to work style reform, automation in major logistics centers and the increasing use of self-checkout machines. Yasuhiro Kiuchi, senior principal researcher of the center, sees potential for growth in the learning-support service industry. Companies in the sector “remains unable to convert their business quickly enough to meet latent demand, such as reskilling for working people,” he said. Meanwhile, labor productivity in the automobile industry was sluggish because of a plunge in production after vehicle test fraud. A rise in labor productivity is said to have a strong correlation with wage increases in the long term. When Japan saw brisk pay hikes in the 1970s to the 80s, labor productivity often rose more than 3 pct per year. But from fiscal 2000 onward, the growth rarely reached 3 pct, and in the three years through fiscal 2024, the growth ranged between 0.1 pct and 0.9 pct. Stronger capital investment is key to labor productivity growth, according to Kiuchi. “It is essential for Prime Minister Sanae Takaichi’s administration to support regional companies suffering escalating labor shortages with tax cuts and other measures to boost their capital investment, in addition to implementing the government’s new growth strategy in 17 areas including artificial intelligence and semiconductor,” he said. END [Copyright The Jiji Press, Ltd.]