Japan’s largest trade union calls for sustained wage growth

Although many organisations have recently introduced a wage hike, Rengo is calling for further wage rises beyond 2023.
By: | April 13, 2023
Topics: Compensation and Benefits | Employee Experience | Japan

Tomoko Yoshino, President of Japanese Trade Union Confederation (JTUC or Rengo), has called for further wage rises beyond next year.

Yoshino argued that the wage hikes that occurred this year are not sufficient if they are a one-off and said trade unions will demand further wage increases for the next two years to sustain wage growth. “We don’t believe that one-off wage hikes for this current season would be adequate. Wages must go up, up and up to break the status quo,” she added.

Labour unions in Japan have always emphasised greater importance on job security rather than aggressive wage hikes following a series of financial crises since the late 1990s, which has slowed wage growth, Yoshino said.

Earlier this year, major organisations in Japan have agreed to an average wage hike of 3.8% for the coming fiscal year, which represents the largest pay raise in about three decades for employees in the country.

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A preliminary survey of 805 unions affiliated with Rengo showed the average hike rate of 11,844 yen (USD $88.97) per month. Rengo’s revised estimates as of April 3 showed 2,500 unions – around close to half of all unions that submitted requests – were on average able to see wage increases of 3.7%. For smaller unions that amount to less than 300 members, the wage increase was the largest in a decade, at 3.42 per cent.

Yoshino credits these results to small firms not having the same resources that bigger ones have, making it harder to pay for wage increases.