The average monthly salary in Tokyo is "half" that of New York—The reason why wages, which were on par in 2012, have fallen to 38th place among 69 cities by 2025.

The average monthly salary in Tokyo is "half" that of New York—The reason why wages, which were on par in 2012, have fallen to 38th place among 69 cities by 2025.

2025年06月27日 01:06

Table of Contents

  1. Understanding "Tokyo vs New York" Through Current Figures

  2. The Wage Gap That Opened Since 2012

  3. Breaking Down the Complex Factors: Yen Depreciation, Prices, and Real Wages

  4. Differences in Industrial Structure and the Impact of High-Value Sectors

  5. Regional and Generational Gaps Remaining in Japan

  6. Practical Implications for Foreign Workers and Expatriates

  7. Policy Challenges and Actions Companies Should Take

  8. Future Outlook and Recommendations for Readers


1. Understanding "Tokyo vs New York" Through Current Figures

In Deutsche Bank's 2025 survey, Tokyo's average post-tax monthly salary was $2,592 (approximately 370,000 yen), ranking 38th, while New York's was $5,128 (approximately 740,000 yen), ranking 7th, with the monetary gap expanding to about 2.0 times.kumin.news
Additionally, private surveys indicate that Tokyo's average monthly salary is 576,000 yen ($3,950), higher than the national average but still mid-range by international standards.housingjapan.com



2. The Wage Gap That Opened Since 2012

In the 2012 report, the wage gap between Tokyo and New York was within a few percent. However, the U.S. saw nominal wages rise by over 4% annually, driven by the technology and financial sectors. Meanwhile, Japan experienced deflation and low growth, with nominal wages remaining nearly flat, compounded by yen depreciation, significantly reducing dollar-denominated wages.businessinsider.com



3. Breaking Down the Complex Factors: Yen Depreciation, Prices, and Real Wages

  • Exchange Rate Factors: In 2025, the yen exchange rate fluctuated between 145 and 160 yen per dollar, significantly reducing dollar-denominated wages.

  • Price Factors: Tokyo's housing rent index rose 14% compared to 2012, and public utility charges increased by 9%, surpassing wage growth and squeezing real income.

  • Wage Factors: The base pay raise rate for large companies increased to 5.2% in 2024 but remains below the OECD average in the long term.housingjapan.comtokyoportfolio.com



4. Differences in Industrial Structure and the Impact of High-Value Sectors

In New York, finance, IT, and professional services account for 45% of GDP, with an average annual income in the $100,000 range. In contrast, Tokyo has a higher ratio of manufacturing, retail, and public services, with limited primary employment in high-value sectors. As a result, while there are high incomes among the upper class, there is a lack of a robust middle class.businessinsider.comhousingjapan.com



5. Regional and Generational Gaps Remaining in Japan

Tokyo's monthly salary is 1.23 times the regional average, but there is approximately a 60% difference by age, with a national average of 280,000 yen for those in their early 20s and 450,000 yen for those in their late 50s. Additionally, the average salary for women is only 75.7% of that for men, indicating a severe gender gap.tokyoportfolio.com



6. Practical Implications for Foreign Workers and Expatriates

  • Salary Levels: For middle management in foreign companies, an annual salary of 9 to 12 million yen is standard. Negotiating a package that includes housing and international school tuition support is crucial.

  • Cost of Living: For singles, a monthly budget of 300,000 to 400,000 yen is typical, while for families, 700,000 to 1,000,000 yen is a guideline. Without allowances to supplement living expenses, disposable income can significantly diminish.

  • Taxation: Japan uses a comprehensive taxation system with a top progressive tax rate of 45%. Confirming foreign tax credits and double taxation treaties is essential.



7. Policy Challenges and Actions Companies Should Take

  1. Sustainable Wage Increases: The government promotes wage increases through tax incentives.

  2. Shift to High-Value Industries: Strengthening financial and IT clusters through startup support and deregulation.

  3. Investment in Human Capital: Improving labor productivity through reskilling subsidies and expanding job-based employment.

  4. Promotion of Women's Participation: Expanding support for balancing childcare and work to reduce the wage gap.



8. Future Outlook and Recommendations for Readers

As long as the yen remains weak, the dollar-denominated wage gap will not be easily bridged, but if Japanese companies expand base pay and industries move toward high-end sectors, there is room for narrowing the gap in the medium to long term.


For foreigners, Tokyo remains attractive for its safety, cleanliness, and well-developed infrastructure, but"evaluating not just salary but the overall compensation package"is essential. Companies must also establish compensation systems that meet international standards to secure top talent in this era.housingjapan.comtokyoportfolio.com


List of Reference Articles

  1. Yomiuri Shimbun "Tokyo's Average Monthly Salary is Half of New York's... From Similar Levels in 2012 to Now 38th Among 69 Cities Worldwide" (June 26, 2025)kumin.news

  2. Deutsche Bank Research Institute "Mapping the World’s Prices 2025" Summary – Business Insider (June 25, 2025)businessinsider.com

  3. Housing Japan "Average Salary in Japan and Tokyo: Complete Guide for 2025" (June 24, 2025)housingjapan.com

  4. Tokyo Portfolio "Average Salary in Japan (2025 Research)" (June 15, 2025)tokyoportfolio.com

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