Japan’s labour organisations are requesting a 4.5% salary increase, the highest since the 1990s.
TOKYO, April 16 (Reuters) – A national labour tally revealed that Japan’s trade unions are requesting the largest wage increase in more than two decades during their spring pay negotiations, as the government and central bank encourage companies to raise employees’ wages to support the economy.
According to the Japanese Trade Union Confederation, a poll of more than 2,000 unions nationally revealed an average 4.49% increase proposal for this year, the first time above 4% since 1998’s 4.36%. (JTUC). According to a JTUC release, this is also the highest level since the mid-1990s.
Workers in the world’s third-largest economy have been emboldened by officials’ demands for wage increases in order to maintain the fragile post-pandemic economic rebound, which is threatened by four-decade-high inflation.
Despite the higher cost burden, major Japanese corporations have guaranteed big wage raises in order to retain skilled employees amid a labour shortage.
Toyota, the world’s largest automaker, accepted a union demand for the highest basic wage raise in 20 years last week, followed by Honda’s deal with its union asking for a 5% pay increase.
Nintendo declared a 10% increase in base compensation for employees, while Fast Retailing, the parent company of Uniqlo, announced a 40% increase.
According to the JTUC early poll, the average union demand during this year’s annual labour talks, known as “shunto” in Japanese, was much higher than the 2.97% recorded in 2022.
The JTUC, also known as “Rengo,” is the country’s biggest labour organisation, covering approximately seven million workers. Although those working in smaller companies, on temporary contracts, or without union participation tend to receive much lower, if not flat, pay increases, the outcome of shunto is viewed as a predictor of the country’s wage patterns.
According to the JTUC, its unions and businesses agreed on average on 2.07% pay increases last year, which was greater than the previous two years but still fell short of Prime Minister Fumio Kishida’s call for a larger raise to stimulate development.
According to the Japan Economic Research Center, big companies will give average 2.85% pay increases for the fiscal year beginning April, which would be the fastest pay increases since 1997.
The result of the wage increase discussions is, according to Bank of Japan officials, an essential measure for determining the future path of its ultra-easy monetary policy.
