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 Widening Wage Gap 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

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



2. The Widening Wage Gap 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's nominal wages remained nearly flat due to deflation and low growth, with yen depreciation further reducing dollar-denominated wages significantly.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 145-160 yen per dollar, significantly reducing dollar-converted wages.

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

  • Wage Factors: The base pay increase rate for large corporations rose 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 average annual incomes 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 high incomes exist among the upper echelons, the middle class lacks depth.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 about a 60% difference by age, with a national average of 280,000 yen in the early 20s and 450,000 yen in the late 50s. Additionally, the average salary for women is only 75.7% of that for men, highlighting a serious gender gap.tokyoportfolio.com



6. Practical Implications for Foreign Workers and Expatriates

  • Salary Levels: For middle management in foreign companies, the annual salary range is 9 to 12 million yen. Negotiating packages that include housing and international school tuition subsidies is crucial.

  • Cost of Living: For singles, the monthly cost is 300,000 to 400,000 yen, and for families, it's 700,000 to 1,000,000 yen. Without allowances to cover living expenses, the actual disposable income significantly decreases.

  • 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 corporate wage hikes 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 easily close, but if Japanese companies expand base pay and industries move towards high-end sectors, there is room for narrowing the gap in the medium to long term.


For foreigners, Tokyo still offers the appeal of safety, cleanliness, and well-developed infrastructure, but it is essential to judge based on "not just salary but the overall compensation package." Companies also need to establish remuneration systems that meet international standards, as the era of securing talented personnel without them is coming to an end.housingjapan.comtokyoportfolio.com


List of Reference Articles

  1. Yomiuri Shimbun "Tokyo's Average Monthly Salary is Half of New York's... From Being Comparable 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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