Japan PM renews call to reverse salary downtrend

This comes as his government seeks to achieve what it has called an era of “new capitalism” ahead of this year’s annual wage negotiations.

His latest call came at a New Year gathering of Rengo, Japan’s main labour confederation, where he said, “We will squarely deal with wealth distribution towards the middle class. We will generate a virtuous cycle by distributing the fruit of growth, leading to the next growth. At the upcoming spring labour negotiations, I expect wage hikes suitable for an era of new capitalism to materialise.”

Kishida was the first prime minister to attend Rengo’s New Year event in nine years.

At a separate gathering earlier, Kishida urged the country’s three business groups, including Japan’s largest Keidanren, to take an “aggressive stance” towards implementing wage hikes.

The prime minister had said raising wages was “extremely important” as recovery from the COVID-19 pandemic would require wealth distribution to the middle class. “Now is the time to shift the phase away from the contractionary cycle caused by deflation towards a virtuous cycle of growth and wealth distribution,” he said.

READ: Japan PM urges companies to increase wages next year

Despite offering tax breaks for Japanese companies whose profits have recovered to pre-pandemic levels to raise wages by 3% or more, in recent years, top Japanese companies and labour unions have raised wages by around 2%.