Annual wage talks effectively kick off in Japan

January 28, 2019

Tokyo--A two-day management-labor forum of the Japan Business Federation, or Keidanren, began in Tokyo on Monday, effectively marking the start of this year's "shunto" annual spring wage talks.

In a speech, Keidanren Chairman Hiroaki Nakanishi expressed hope that member companies will consider various steps to increase annual pay and improve labor standards in a comprehensive manner.

The Japanese Trade Union Confederation, or Rengo, the umbrella body for labor unions in the country, is requesting a pay rise of some 4 pct through the combination of an across-the-board pay-scale hike and regular wage increase.

Keidanren, the largest employers' group in Japan, considers a pay-scale increase as only one option.

The shunto talks come as uncertainty is growing over the course of corporate earnings due chiefly to a U.S.-China trade fight, though Japan's current economic expansion is expected to become the longest in post-World War II history.

Prime Minister Shinzo Abe has called on employers to raise salaries this year to prevent the country's economic growth from being derailed by the planned consumption tax increase in October from 8 pct to 10 pct.

Abe, however, has not mentioned a specific pay hike target, out of consideration for Nakanishi, who opposes government intervention in wage talks.

Last year, companies raised employee pay almost in line with a request from Abe for an increase of at least 3 pct. It is widely believed that the same level of pay increase is unlikely this year.

In his speech at the forum, Nakanishi encouraged Keidanren member firms to make wage decisions on their own as in the past years.

Full-fledged wage negotiations are set to begin after a meeting between Keidanren and Rengo leaders scheduled for Feb. 5. Jiji Press