Japan’s young workers head to Australia, eyeing higher pay, better work-life balance

He’s among a record number of young Japanese granted working holiday visas in Australia last financial year, lured by higher wages that are made even more attractive by the weakening yen.

“From a salary perspective, it’s so much better here,” said the 25-year-old, who earns around A$5,000 (US$3,300) a month after tax and lives in Goulburn, south of Sydney. “If you want to save money, Australia is the place to be.”

“Youth are questioning Japan’s economic outlook,” said Yuya Kikkawa, an economist at Meiji Yasuda Research Institute. “Living conditions are far tougher than the headline inflation figure suggests.”

The Bank of Japan finally scrapped the world’s last negative interest rate last month amid signs a virtuous cycle of wage gains is feeding demand-led inflation. But even after Japanese trade unions won their biggest wage hike in more than 30 years last month, there remains a notable gap in real wages with other advanced economies.

In 2022, average annual wages in Japan were US$41,509, compared with Australia’s US$59,408 and US$77,463 in the US, according to the latest data from the Organisation for Economic Cooperation and Development.

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A long-running trade off that put job security ahead of higher pay made more sense when prices were barely moving. Now with inflation at its strongest in decades, Japanese are starting to realise that years of static wages leave many of them budgeting each month before their next pay check.

“Japan’s wages hadn’t risen at all for 20 years while other countries were increasing theirs,” said Atsushi Takeda, chief economist at Itochu Research Institute. “With the yen getting weaker, the gap has become even