A perception of labor shortage suggested by the employment conditions DI in the March Tankan has heightened further, which can be regarded as full employment. The major feature of recent economic activity is that labor market conditions continue to tighten despite the sluggishness observed in exports and production. In this situation, upward pressure has continued to be exerted on wages (Chart 3).
In this spring’s labor-management wage negotiations, or so-called shunto, it is almost certain that base pay will be raised for a third consecutive year. Although the rise in large firms is likely to be somewhat less than that of last year, wage increases seem to be spreading to small firms and non-regular employees, including part-time employees.