Projected Lifetime Salary Rankings in Japan
Do the numbers reflect an appropriate balance of effort and reward?
What’s new: Recently, the results of a nationwide ranking of projected "lifetime earnings" - the total amount of money you can earn if you join a company as a recent graduate (age 22) and work until you retire (age 60) - were released.
Context: While job hopping has certainly become much more common in Japan than it was in the past, when the concept of lifetime employment, known in Japanese as shushin-koyo (終身雇用), was a core component of Japan, Inc, it is a fact that Japanese employees still tend to have relatively long tenures with their companies. So while the notion of a "lifetime salary" at a single company may seem atypical to non-Japanese readers, it is still not that unusual in Japan.
Why it matters: This list provides insight into which companies in Japan tend to pay the highest salaries and which industries are considered attractive by recent graduates. While the averages are theoretical, the overall results can also be used to measure whether lifetime salaries are trending up or down.
Definitions and disclaimers: Of the approximately 3,700 listed companies in the Kaisha Shikiho (会社四季報) or Japan Company Handbook, 3,307 companies were included in the ranking, excluding those with fewer than 10 employees on an unconsolidated basis and those that do not publish average wages.
The calculations were based on data from the Summer 2023 issue of Kaisha Shikiho (会社四季報) or Japan Company Handbook, publicly available data from securities reports, and the Basic Survey on Wage Structure, a survey and publication by the Ministry of Health, Labor, and Welfare.
Wage curves (wage growth rates) were calculated for each industry category and the amounts were estimated by applying them to the average annual salary and age of each company. Although these estimates are theoretical, they should serve as a guide to some extent.
It should be noted that the salary structure differs between a company with only graduates in career positions and a manufacturer with production sites, and that although there is a gender pay gap, this is the average amount paid to employees.
In some cases, pure holding companies have only a small number of employees responsible for core functions, and their annual salaries may differ significantly from those of the main subsidiaries where the majority of employees are employed. In principle, such pure holding companies are excluded from the ranking. Companies with missing data on number of employees, annual income and age are also excluded in some cases.
By the numbers: While the results are only theoretical estimates, they can point eager job seekers toward certain high-ranking companies and industries.
Average: The average lifetime salary of the target companies is 228.89 million yen (approximately $1,525,000). Although the number of employees differs slightly, this is a slight increase of 0.9% from the ranking for the same period last year (226.84 million yen or $1,511,000). In addition, 289 companies had lifetime salaries exceeding 300 million yen ($2 million), up from 248 companies in the previous year.
Highest Ranking Company: The top company was M&A Capital Partners with 1,317,980,000 yen ($8.781 million). Founded in 2005, this publicly traded company with 258 employees is listed in the Prime Market of the Tokyo Stock Exchange. It provides M & A advisory services with a particular focus on development succession. The company's clients are mainly owners of small and medium-sized companies who do not have a designated successor.
Other Highly Ranked Companies: Osaka-based Keyence, a global leader in factory automation equipment, ranked second with 907.99 million yen ($6.05 million). Considering that Keyence is a global company with more than 10,000 employees worldwide, its ranking is impressive. The average annual salary at Keyence is 22.79 million yen ($152,000), one of the highest in Japan. The average age of its employees is only 35.8.
Perhaps as expected, Japan's general trading companies, known in Japanese as sogo-shosha (総合商社), occupy many of the spots in the upper cohort. These include Mitsubishi Corporation, Itochu Corporation, Mitsui & Co, Marubeni Corporation, and Sumitomo Corporation. The attractiveness of these companies in terms of compensation also contributes to their popularity for employment.
Real estate developers and pharmaceutical manufacturers are also near the top of the list.
Ranking of Some of Japan’s Most Famous Companies: When you think of Japan, Inc., a handful of companies immediately come to mind. However, not all of them rank highly in terms of lifetime salary. Sony Group ranked 39th with only 405.2 million yen ($2.7 million) and an average salary of only 11 million yen ($73,421). Nintendo ranked 55th with only 380 million yen ($2.53 million) and an average salary of only 9.85 million yen ($65,622). Toyota Motor ranked 134th with only 329 million yen ($2.19 million) and an average salary of only 8.95 million yen ($59,620).
What’s next: There is no doubt that the recent dramatic depreciation of the Japanese yen against the U.S. dollar makes these numbers look lower than one would expect, but even that does not tell the whole story. The bottom line is that wage growth in Japan has been stalled for the past three decades. While there has been some improvement recently, led by loud calls from the central government for companies to raise annual wages, wages in Japan remain stubbornly low. Labor unions are joining the call for higher compensation. For Japan, Inc. to attract and retain global talent, wages will need to adjust upward for an extended period of time.
Links to Japanese Sources: https://toyokeizai.net/articles/-/709382, https://toyokeizai.net/articles/-/711428, and https://toyokeizai.net/articles/-/712683.
#lifetmeemployment #salary #japancompanyhandbook #終身雇用 #生涯給料 #給料 #会社四季報
While it is true that wage growth in Japan has been stalled for the past three decades, isn't it also true that an entire generation or more of Japanese has been able during those decades to finance the purchase of homes, cars and other goods and services at ultra-low interest rates, which have been the envy of consumers in most of the rest of the world, while also enjoying full employment and very low, or even negative, price inflation? I have often wondered whether said generation feels these circumstances have been a good thing, or a bad thing, for them and their families?
a lifetime slaving away, 17 hrs/day, just to make one or two million.......if you don't karoshi first. crazy work culture here. so glad im not japanese.