In this situation, upward pressure has continued to be exerted on wages (Chart 3). In this
spring's labor-management wage negotiations, or so-called shunto, it is almost certain that
base pay will be raised for a third consecutive year. Although the rise in large firms is likely
to be somewhat less than that of last year, wage increases seem to be spreading to small
firms and non-regular employees, including part-time employees. This can be explained by
the fact that, at small firms, mobility of employment is relatively high and wages are
susceptible to the effects of labor market conditions. In addition, firms continue to be
willing to return their profits to their employees in the form of bonuses. Thus, the high
corporate profits have continued to positively affect employee income.