Japan’s small-sized firms struggle to offer higher pay to keep up with inflation

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Over half of small and mid-sized companies in Japan plan to raise salaries this year amid a labour crunch and record inflation, according to a survey by the Japan Chamber of Commerce. Wages in Japan have crept up recently, as companies face pressure to compensate employees for cost of living increases. However, small- and medium-sized businesses have to cope with surging material costs and a more unpredictable margin, making it challenging for them to pay workers.

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