Annual wage negotiations in Japan kick off
The Japan Business Federation is vowing pay hikes that outpace price rises in line with Prime Minister Fumio Kisida’s repeated calls to rejuvenate an economy plagued with inflation, with their annual wage negotiations kicking off this week.
The wage negotiations at most larger organisations are expected to conclude by mid-March, with smaller firms completing theirs later.
The country’s most powerful business lobby is urging its members to offer pay increases higher than last year’s 3.99% hike during this year’s wage talks. The Japanese Trade Union Confederation, or Rengo, for example, is looking to achieve a pay hike of 5% or higher, compared with its goal of around 5% in the 2023 wage negotiations.
Major Japanese organisations raised wages by 3.99% on average in last year’s wage negotiations, the biggest increase in 31 years, according to the business lobby.
Masakazu Tokura, the Chairman of Keidanren, emphasised in a video message that the positive effect must also spread to small and medium-sized firms to achieve ongoing wage increases in the country.
A number of major firms had expressed their intent to considerably boost their workers’ pay in response to inflation even before the negotiations, logging its largest increase in 41 years last year.
Real estate developer Mitsui Fudosan Co., for example, said it will raise wages by 10% on average, while convenience store operator Lawson Inc. said it will offer a pay hike of more than 5%, reported Kyodo News.
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“Our way of thinking and practices, which were formed under a long-running deflation on the premise that prices and wages are not likely to change, are beginning to change,” Tomoko Yoshino, Head of Rengo, said in a speech. Calling this moment a critical juncture in realising a society where economy, prices and wages all grow stably, she called on large organisations to review their business terms with smaller firms to allow for their price increases so they can raise wages.