"After Being Promoted to Director-General, My Salary Dropped by Over 10 Million Won"...Japanese Workers Shun Promotion

With Overtime Pay, Young Bureaucrats Surpass Their Supervisors in Salary
"Employment Ice Age Generation" in Their 40s and 50s Express Discontent... Reluctance to Seek Promotion Grows

The so-called "salary cliff" phenomenon, where promotions in Japan's central government bureaucracy actually result in lower annual salaries, is spreading. Analysts note that the recent trend among Japanese companies to avoid managerial positions is now also emerging within the bureaucratic community.

On May 31, local media outlets, including Nihon Keizai Shimbun (Nikkei), reported that cases of reduced annual salaries following promotions to director-general or division head positions continue to occur in Tokyo's Kasumigaseki district, which is home to a concentration of Japanese central government ministries. While overtime pay is fully provided to younger employees, resulting in higher incomes for field staff who work long hours, managers who are excluded from overtime pay see their actual take-home pay decrease after promotion.

Previously, Japan's central government ministries had routinely practiced so-called "service overtime," paying allowances for fewer hours than staff actually worked due to budget constraints. This culture of excessive overtime led to the area being infamously nicknamed "Black Kasumigaseki."

Tokyo Kasumigaseki, the area concentrated with Japanese central government ministries. Screenshot from the Ministry of Land, Infrastructure, Transport and Tourism of Japan website

The atmosphere began to change in 2021. At the time, Taro Kono, then Minister for Administrative Reform, instructed that all overtime hours be recorded and that full allowances be paid. Since then, staff who handle late-night parliamentary responses and policy reviews have received their entire overtime pay.

However, this improvement for younger bureaucrats has led to a peculiar situation where subordinates receive higher annual salaries than their supervisors, who lose their allowances upon promotion to managerial positions. An executive at the Ministry of Internal Affairs and Communications told Nikkei, "After being promoted to director-general, my annual salary dropped by more than 1 million yen."

The Japanese government is also aware of the problem. The National Personnel Authority, responsible for civil service appointments, began expanding eligibility for the headquarters' work adjustment allowance to include managers starting in April this year, paying them 51,800 yen per month. However, there is criticism on the ground that this allowance alone cannot sufficiently compensate for the decrease in annual salary.

In particular, members of the so-called "employment ice age generation" in their 40s and 50s have voiced dissatisfaction. While their juniors now benefit from improved compensation, they themselves endured long hours of unpaid overtime in their youth and are now excluded from allowance eligibility after being promoted to managerial positions. As a result, it is reported that there is a growing tendency across Japan to avoid managerial positions, as promotions bring little in the way of additional rewards and only increase work burdens and responsibilities.

Experts warn that such a structure may accelerate the outflow of talent. As the increase in responsibility and workload from promotions outweighs the rewards within the bureaucracy, more mid-career bureaucrats are considering moving to the private sector. In fact, wage hikes at private companies have continued, with the average wage increase rate at large firms this year reaching 5.46%, surpassing 5% for the third consecutive year.

Nikkei pointed out that if the perception that "promotion is a loss" becomes entrenched, it could weaken the competitiveness of the bureaucratic organization, and called for reforms in work practices at the political level.

This content was produced with the assistance of AI translation services.