Will Wages Increase?

Concerns that Unreasonable Wage Hikes Will Impact Employment Unfavorably

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During the latter half of the 1990s, the domestic economy deteriorated, and, because corporations restrained labor costs, wages (nominal total cash earnings) began to decline. As a result of the transition in the compensation system from setting wages by seniority to wages based on employee performance, it became more difficult to raise scheduled cash earnings, and, as a consequence, wages did not sufficiently reflect corporate profitability, and bonuses also declined.