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An examination of the postwar trend in wage gap by age and rank reveals several boom (worker shortage) periods and a narrowing gap between young and middle-aged workers. This trend translates into a narrowing wage gap among employees of different ranks. Indeed, the compensation of ranked employees (especially, those in management positions) has become substantially low relative to what it once was in the past. This phenomenon has become a factor of low motivation among ranked employees and ordinary employees who later will become ranked employees. Also, the phenomenon makes the so-called”nominal manager”problem more complex.
Due to the global financial crisis, the current economic condition is still uncertain, and the labor market is slack. The supply of young labor is declining due to the declining birthrate, and the economy’s productivity is falling due to changes in the industrial structure. Given these facts, it is highly plausible that the economy will face a labor shortage in the future.
This article analyzes data to examine the past and predicted trends of such an intergenerational gap in regular employees'(seishain) compensation and considers how management should address anticipated medium- and long-term issues.