Business, Labor Leaders Reaffirm Vow to Raise Wages in Shunto Talks

Jiji Press

17:59 JST, February 1, 2024

TOKYO (Jiji Press) — Business leader Masakazu Tokura and labor leader Tomoko Yoshino Thursday reiterated their commitment to achieving wage raises that outpace inflation in this year’s shunto spring wage talks.

In their meeting in Tokyo, Tokura, chairman of the Japan Business Federation (Keidanren), and Tomoko Yoshino, president of the Japanese Trade Union Confederation (Rengo), agreed that it is crucial to ensure small companies pass higher costs on to customers to secure financial resources for wage hikes.

The meeting marked the full-fledged start of the shunto talks.

“It’s essential this year for the momentum of wage hikes to steadily spread to prompt structural wage increases at small and midsize companies,” Tokura said at the start of the meeting.

“I hope major companies will take the lead in this trend by becoming more forthcoming in accepting higher costs,” Yoshino said.

Tokura told reporters after the meeting that the two sides “got off to a good start,” adding that he wants to strengthen investment in people to “bring about a virtuous cycle of sustainable price and wage increases.”

Yoshino said that both sides are “facing the same direction” and expressed the labor side’s readiness to work together to address challenges such as overcoming deflation, promoting price increases to cover costs and resolving labor shortages.

While the two sides are in agreement to promote sustainable wage increases and help firms pass on higher costs to customers, they are apart over how wages are raised.

Rengo is seeking a pay-scale hike of at least 3%, while Keidanren maintains the stance that a pay-scale increase is just one of many options for wage rises including implementing regular pay raises and increasing bonuses.

The government, which hopes to shore up its approval ratings by promoting wage hikes, is keeping a close eye on this year’s shunto.

The Bank of Japan is also watching the shunto talks closely to judge whether the country’s economy is entering a virtuous cycle of higher prices and wages that would allow the central bank to end its negative interest rate policy.