Japanese unions demand highest wage hikes in 30 years

Fuelled by inflation and labour shortages, a historic 5.85% wage hike demand has been called for as labour negotiations continue.
By: | March 12, 2024
Topics: Compensation and Benefits | Japan | News

Preliminary data from the Japanese Trade Union Confederation (Rengo) has revealed an unprecedented surge in wage hike demands during this year’s shunto labour-management negotiations. The weighted average of wage hike requests put forward by 3,102 member unions stands at 5.85%, marking the first time in three decades for the average to exceed the 5% threshold observed in past final survey results.

This development comes amidst a confluence of factors, according to Tomoko Yoshino, President of Rengo. Rising inflation, persistent labour shortages, and a rebound in corporate profits are all fuelling union demands for “considerably good levels” of wage increases.

The average requested increase translates to 17,606 yen (US$119.81) per employee, a jump of 4,268 yen (US$29.05) from last year’s figures. A total of 3,726 labour unions have already submitted their demands to management, accounting for over half, or 52.3%, of the unions covered by Rengo’s tally of shunto requests.

READ MORE: Annual wage negotiations in Japan kick off

Unions with fewer than 300 members are also pushing for an average increase of 5.97%, surpassing larger unions with over 300 members at 5.84%. Yoshino interpreted this as a potential sign that organisations are recognising the growing importance of investing in their workforce.

Shunto is the annual spring wage negotiation process between Japanese labour unions and management. Rengo itself is calling for a minimum wage hike of 5% for 2024, including both pay scale adjustments and regular raises, reported The Japan Times.