Abe Urges Keidanren to Raise Pay

December 26, 2018

Tokyo--Japanese Prime Minister Shinzo Abe on Wednesday urged the Japan Business Federation, or Keidanren, to increase wages in next year's "shunto" labor-management negotiations in spring.

"I'd like to ask you to carry out wage hikes to make the Japanese economy's recovery trend more solid," Abe said in a speech at a meeting in Tokyo of the country's largest group of employers.

Abe made a wage hike request to the business circle for the sixth consecutive year. The latest request apparently reflected his hope to ensure that the economy will not stall after the planned consumption tax rate hike to 10 pct from 8 pct in October 2019.

While saying that he should refrain from referring to any numerical target, Abe noted that a 5 pct pay hike was carried out in 1989, about twice the level for this year. In 1989, Japan was in the very midst of the asset inflation-driven bubble economy.

Abe declined to comment on recent sharp drops in stock prices.

Although there are concerns about various issues over the world economy, Japan's economic fundamentals are strong, he said.

On Abe's reference to the 5 pct wage hike in 1989, Keidanren Chairman Hiroaki Nakanishi indicated in talks with reporters after the meeting that he does not think the prime minister showed a numerical target that he wants the group to adopt for the 2019 shunto.

Nakanishi also reiterated that Keidanren will not include a pay hike target for member companies in its 2019 shunto guidelines, to be released next month, regardless of any requests from Abe.

Keidanren is aiming to prevent shunto talks from being led by the government, after the group included a 3 pct pay hike goal in its shunto guidelines for this year following a request from the prime minister. Jiji Press