Working in Japan and managing salary expectations: How much can you make working in Japan?

Let’s face the reality first.

The adult average salary in Japan:

The base minimum hourly wage was raised to ¥1004/hr  which is around a whopping $6.92 USD  at today’s exchange rate.

Iwate prefecture clocks in at one of the lowest with  ¥896/hr.

According to this government survey, a key characteristic is that while there is no significant difference in annual income in the 20s, the gap between male and female workers tends to widen from their 30s onward.

Source:   https://www.nta.go.jp/publication/statistics/kokuzeicho/minkan2021/pdf/002.pdf

By Age:

Source：National Tax Administration Agency, “2021 Statistical Survey of Private Sector Remuneration,” 2021.

By Industry:

Overall, industries related to lifelines, such as electricity, gas, heat supply, and water supply, tend to have high annual incomes.

Source ：National Tax Administration Agency, “2021 Statistical Survey of Private Sector Salaries

But Why?

Why is the salary level so low?

After seeing the data, it’s pretty dismal, yes I know.

Combined with outdated corporate culture and long hours, there seems to be no reason to endure this.

But why doesn’t the whole country crumble into a huge civil uprising?

Well, one major factor is that low pay is a trade off for lifetime employment and financial security.

This financial security is tied into all the banking loans and financial systems as well.

Most respected, larger corporations, due to strict Japanese working laws, technically cannot fire you. That’s why, even if you were a crappy employee, you may find yourself simply transferred to an unproductive division instead of being canned.

This topic of job security, which warrants a different blog post altogether, is directly related to the slow reaction times of Japanese corporations.

Learn Japanese for that extra edge

Unlike most western countries which value skill over loyalty and length of employment,  most major Japanese corporations are stuck in the hiring system where guaranteed lifetime employment is the norm. This is one of the reasons why corporations are so slow when reacting to things, because they cannot act quickly, or sometimes do not have the human assets to counter the quick changes of the time.

Of course, that is changing but in general, the stereotype still holds true.

One factor that is a make-it or break-it skill is language.

The truth is, you should have a strong knowledge of Japanese if you want to really go anywhere.

It’s not impossible to climb the ladder without it, but you will have far more opportunities and deeper relationships if you can speak.

My personal take is that if you were serious about anything, learn the language. I worked in so many companies where the foreigner who could not speak, were always left out of the good stories. It wasn’t about racism or anything like that. It has more to do with the fact that the Japanese staff are overworked as it is, held to a stiff standard and with all the need for maximum efficiency at play, don’t have time to slow down and teach Japanese to a foreigner. It’s just a corporate reality.

If you can read and write Japanese, you will gain a tremendous advantage.

Even if you cannot handwrite the kanji , but can use software you’ll have an undeniably large advantage over your counterparts who can only speak.

So what to do?

If you can, try going to a  foreign company that respects the global wage standards.

Obviously, those may require a higher educational degree, especially if you’re going into the finance, pharmaceutical or tech industries.

If you’re lucky enough to work at a company that is considering sending you to Japan for a couple years, that is probably your best gig.

I know many people who have been offered to stay in Japan and run the Japanese office.

I strongly advise against working at a small to midsize Japanese company, because you’ll have much less of a chance at changing the corporate climate, especially if you get stuck with an unpleasant Japanese boss.

Also, try to steer clear of very old, traditional companies because they cling to the old corporate styles almost as if it was a badge of honor.

Anything over 35 years is a yellow flag, and really do your due diligence on companies that are 50 to 100 years old.

Closing

It may seem like a lost cause but it’s not.

It’s weird, you wonder how people can survive with such low salaries, and with exchange rate, now being as bad as it is, (¥145 at the time of writing) many Japanese cannot afford to travel out of the country.

Depreciation has kept overall prices lower, but now that the rest of the world is moving in a different direction, Japan is faced with a big challenge.

It’s hard to raise interest rates like other countries because then people will not be able to pay off their loans, and their household budget will even be hit harder. \

Many people were assured that their long-term home loans would maintain almost nonexistent interest rates for their whole period, so even a small increase will throw off their expenditures.

When you’re only making ¥4 million a year, considering your take-home salary, that’s a big concern.

I guess if corporations stopped hoarding cash and paid employees higher rates, that might be one solution, but it’s not that easy.

This is because as mentioned before,  Japanese employment at major corporations is not based off worker skills, but more on  lifetime employment, so it really is a headache that the country needs to address at one point.

Unfortunately, this cannot last forever and the day of reckoning is coming. Add to this the country’s stringent immigration policy (despite declining birth rate) and you can see why the general population doesn’t trust the Japanese politicians.

All the warning signs have been out there for years and politicians are seen as having done nothing to address it, but rather promote their own individual needs and careers.

But I digress, greatly.

All this may have nothing to do with your next potential job in Japan, but this reality does exist, and knowing about it, even in the back of your head, will arm you with knowledge to make better decisions in the working environment.

In the end, I think that from my experience working in Japan, despite all these cautionary factors I brought up, working in Japan could be a great experience.

You’d get to stay in Japan long term and experience all the wonderful things that country has to offer, including nature, gourmet food, and high-tech living.

Most of the bad things about Japan are from the Japanese people anyways.

If you are a good people person, then perhaps, you can create your own ideal working solution. I know many expats who have.

If you want to try living in Japan, be sure to manage expectations and that will be your first step towards a happy stay here in Japan!

I’m sure many of you have gone through part of this, what’s your experience been like?

Leave it in the comments below!