Kishida calls for pay hike of over 3%

Jiji Press
Prime Minister Fumio Kishida speaks at a “new capitalism” meeting at the prime minister’s office on Friday.

TOKYO (Jiji Press) — Japanese Prime Minister Fumio Kishida expressed hope Friday that companies will agree to increase wages by over 3% in the “shunto” labor-management wage negotiations next spring.

“I want companies whose earnings have returned to levels before the novel coronavirus pandemic to realize a wage increase of over 3%,” Kishida said in a “new capitalism” meeting at the prime minister’s office.

With the pace of wage growth in Japan slowing in recent years, Kishida aims to realize his signature policy of creating a virtuous circle of economic growth and wealth redistribution by presenting a specific pay hike target, pundits said.

This is the first time for the government to show such a target since the administration of then Prime Minister Shinzo Abe requested 3% hike deals in the 2018 shunto.

Still, Kishida refrained from seeking a uniform pay increase and only expressed “hope” for higher wages in view of widened income gaps between industries amid the coronavirus pandemic.

During the meeting, Kishida said he expects a wage hike drastic enough to usher in the era of new capitalism.

The prime minister at the same time hammered out the policies of expanding deductions to promote wage hikes through fiscal 2022 tax system reform and increasing subsidies to loss-making small and midsize firms paying more to employees.