Japan wage talks begin with unions, business agreeing raises needed

The heads of Japan’s largest labor group and top business group met on Monday to discuss the country’s labor market as annual union-management negotiations began, with both sides agreeing on the need for significant wage increases to offset the impact the high inflation.

Tomoko Yoshino, head of the Confederation of Japanese Trade Unions, addresses a meeting with the main business group Japan Business Federation on January 23, 2023 in Tokyo. (Kyodo)

Tomoko Yoshino, head of the Rengo, or Japanese Union Confederation, called for wage increases including base salary increases to ease pain related to the fallout from the coronavirus pandemic and recent rapid inflation. He said this year “should be a turning point to change our future” through sustained wage increases in companies of all sizes across the country.

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Masakazu Tokura, who is the president of the Japan Business Federation, known as Keidanren, agreed at the meeting of the two organizations on the importance of salary increases to overcome economic challenges.

“We are asking for (corporate managers) to respond aggressively by giving prices due consideration and fulfilling their social responsibilities by sustaining or even strengthening the momentum of wage growth,” Tokura said.

The country’s core consumer prices rose 4.0 percent in December from a year earlier, the highest level since 1981, while Japan’s real wages fell for the eighth straight month in November, according to the latest available government data.

Rengo has previously said he will aim for a salary increase of about 5 percent in this year’s so-called spring shunto negotiations, the biggest increase the group has asked for in 28 years. He wants more than half of that increase to come from a base salary increase and the rest from a regular annual raise based on seniority.

According to Rengo, the average wage increase in Shunto last year was 2.07 percent, but government data showed real wages in the country fell for eight months in a row through November due to reduced purchasing power of workers.

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Keidanren asked member companies to try to raise their base salaries, though he said each company would need to take great care to meet Rengo’s salary demands.

Prime Minister Fumio Kishida has asked business leaders to provide wage increases to offset rapid inflation.

Economy, Trade and Industry Minister Yasutoshi Nishimura said Monday he expects companies posting good wages to achieve a 5 percent or more wage increase.

Unions at large companies must submit their requests to management by mid-February, and most usually receive responses by mid-March.

Related coverage:

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Japan’s headline inflation rises 9.7% in 2022

Uniqlo operator raises annual earnings in Japan up to 40%


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