Wage Negotiations Kick Off Amid Surging Prices

Jiji Press

11:00 JST, January 24, 2023

TOKYO (Jiji Press) — This year’s “shunto” wage negotiations in Japan started effectively Monday with a meeting between the chiefs of the Japan Business Federation, or Keidanren, and the Japanese Trade Union Confederation, or Rengo.

The annual wage talks are likely to focus on how much base wages will be increased and how many companies will carry out pay scale hikes at a time when prices are rising faster than wages in the country.

The labor and management sides are in agreement on the need to raise wages in response to surging prices, but are at odds over the levels and methods of pay hikes.

“We need to realize a virtuous cycle of wages and prices,” Keidanren Chairman Masakazu Tokura said at the start of the meeting with Rengo President Tomoko Yoshino in Tokyo.

“While paying particularly close attention to price trends, we will call on [Keidanren member firms] to actively consider raising wages as their social responsibility,” Tokura also said.

Still, Keidanren, the country’s largest group of employers, is advising member companies to choose from methods such as increasing regular wages, providing inflation allowances and raising bonuses as well as pay scale hikes in accordance with their own circumstances.

“There are companies that want to raise pay scales but can’t do it,” Tokura told reporters after the meeting.

Meanwhile, Rengo, the umbrella organization for labor unions in the country, is demanding that the management side select pay scale hikes as the main option.

The organization aims to realize pay hikes of around 5%, including about 3% in pay scale growth, up by 1 percentage point from the level it sought in the previous year.

“The labor and management sides should join forces and make [this year’s shunto] a turning point to change Japan’s future,” Yoshino told the meeting with Tokura.

“This year’s wage review is very important,” she told reporters.

Keidanren is scheduled to hold a labor-management forum meeting Tuesday. The shunto negotiations are set to culminate on March 15, when many major companies are due to make wage proposals to the labor side.