By Eleanor Warnock
TOKYO -- A labor shortage is helping Japan's temporary and part-time workers win greater pay increases than its full-timers, a reversal that adds to signs of gains by lower-wage workers globally.
On Wednesday, some of Japan's largest companies said they would give only modest increases to their full-time employees, in many cases smaller than last year. Toyota Motor Corp., seen as a bellwether for wage negotiations, gave employees a Yen1,300 ($11) bump up in monthly pay -- excluding certain family allowances and seniority increases -- lower than the Yen1,500 raise given last year. Big electronics makers such as Panasonic Corp. and NEC Corp. gave Yen1,000 raises, down from Yen1,500.
By contrast, data last week showed that part-time and contract workers were getting larger boosts. In January, part-time hourly wages rose 2.6% from the previous year, compared with a 0.4% increase for full-time workers' base wages.
On b-style, a listing site for part-time jobs, the average position was offering Yen1,087 an hour in February, up by more than 7% in two months.
"There is a labor crunch overall due to the falling birthrate. If you don't raise hourly wages, you can't secure people," said Keitaro Kawakami, head of b-style's research unit.
Companies tend to find it easier to raise part-time wages in response to economic conditions since they can quickly reverse course in a downturn, whereas the wages of full-timers -- especially in Japan, where lifetime employment remains prevalent at large companies -- are harder to cut.
Still, Japan has been stuck with slow-growing or falling prices for so long -- about two decades -- that even during occasional upturns executives kept a tight lid on wages for all workers, including part-timers.
Now that is beginning to change, and the consequences are greater, as "irregular" workers in part-time, temporary or contract jobs are a bigger part of the economy. These employees made up 37.5% of the workforce in 2016 versus 33% a decade earlier, according to the Labor Ministry. Social scientists say many of these workers hesitate to get married and start a family, a worry in a country where the population has begun shrinking.
Recent signs suggest that in the U.S. and Europe as well, workers at the bottom of the pay scale are beginning to make gains after decades of worry about rising inequality.
"Generally it's a global trend that labor markets are tightening," said Capital Economics economist Marcel Thieliant. "In the U.S., we're clearly seeing signs of stronger wage growth and that's one reason why we think the Fed will be quite aggressive in raising rates."
In a report released earlier this month, the Economic Policy Institute, a Washington, D.C., think tank, found that some of the fastest wage growth in 2016 took place among the bottom tiers of American workers. Hourly wages for people in the bottom 20% gained 6.4%, while those in the 95th percentile and above gained 1.7%, the institute found.
"What stands out in this last year of data is that the economic recovery appears to be finally reaching a broad swath of American workers," wrote institute economist Elise Gould.
A rising minimum wage in Japan, Germany and some U.S. states is contributing to the trend. After Germany introduced a minimum wage for the first time in 2015, wage growth for unskilled workers outpaced average wage growth, according to a report by Germany's Institute of Economic and Social Research.
Prime Minister Shinzo Abe pointed to the downsides of Japan's two-track labor market, divided among protected full-time employees and irregular workers suffering from low pay and uncertainty. He has attempted to push big companies to raise wages for both classes of workers to spur growth. Japan's national average minimum wage was raised to Yen823 an hour in 2016 from Yen798 the previous year, and Mr. Abe has said he wants to make it Yen1,000 by 2020.
That reinforces the bargaining power of job hunters in a market that is the tightest in a quarter-century. Japan's unemployment rate stands at 3% and there are 143 jobs for every 100 job seekers, according to government data.
Smaller companies have to raise pay for temporary help "to account for the instability of employment," while at big companies, "the price of strong unions and stable employment is a check on base-pay raises," said SMBC Nikko Securities economists in a note Friday. They estimated base wages would rise about 0.4% for workers covered by spring wage negotiations, the slowest increase since 2014. Some of those trimming the size of their raises cited flat consumer prices or weaker profits during a portion of 2016 when the yen was strong.
Write to Eleanor Warnock at email@example.com