Japan in the World

A Pressing Need to Address Disparities NOMURA Supply-demand and salary levels by industry Monthly base pay (June 2019), \1000 430.0 410.0 390.0 Education, Learning support Academic research, • Expert & technical services • Communications 370.0 Real estate 350.0 330.0 310.0 ●Information services Wholesaling Construction Electric, gas & water utilities Finance & insurance Manufacturing The changes in work styles brought about by the COVID-19 pandemic are presenting Japan's economic and social structures with serious challenges leading up to the Post-Corona age In Japan, average salary levels tend to be higher for industries with relatively smaller labor shortages or an ability to quickly shift to other work styles such as working from home, but lower for other industries. The normalization of new work styles leading up to Post-Corona may act as a driver to continued shifting of employment from high-income industries where labor shortages are easy to address, to low- income industries with high labor shortages. If this trend is realized, it may further widen domestic income disparities and intensify social friction. Mining Goods rental & leasing 290.0 Transport & postal activities • Healthcare & welfare 270.0 Retailing Lifestyle services, leisure Other services 250.0 230.0 -70 Accommodations, eating & drinking services -60 -50 -40 -30 -20 -10 0 Bank of Japan Tankan Employment Conditions Diffusion Index (September 2019), Surplus - shortage, % points Source: Ministry of Health, Labour and Welfare, Bank of Japan materials 11

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