Photo/Illutration Tomoko Yoshino, chairwoman of Rengo (Japanese Trade Union Confederation), at a wage negotiation with Keidanren (Japan Business Federation) in Tokyo on Jan. 23. (Jumpei Miura)

Japan’s most influential business group signaled it would push for substantial wage increases as demanded by the largest labor organization in the nation during a meeting in Tokyo on Jan. 23.

During the annual “shunto” labor negotiations, Tomoko Yoshino, chairwoman of Rengo (Japanese Trade Union Confederation), pressed for sharp wage hikes in light of the soaring commodity prices over the past several months.

“We should take this chance to finally emerge from a long darkness and create a turning point for both workers and employers to remake Japan’s future by joining forces,” she said at the meeting.

In response, Masakazu Tokura, chairman of Keidanren (Japan Business Federation), struck a positive note.

“We are urging our member companies to respond positively to wage increases as their social responsibility by maintaining and bolstering momentum for the move while paying close attention to price trends,” he said.

Although this may be good news for employees of large corporations, workers at small and midsize companies, who account for 70 percent of Japan’s entire workforce, may not see substantial increases in their income.

Most of the smaller companies do not have financial resources to raise salaries on a par with current inflation levels.

The focus of attention during the wage negotiations, which are expected to go into full swing over the next few months, will be the size of increase.

Prime Minister Fumio Kishida has repeatedly urged businesses to raise wages to a level higher than the inflation rate.

The Consumer Price Index for all items, excluding perishable foods, for December rose 4.0 percent year-on-year, the highest in 41 years.

Real wages, which are calculated after taking into account the effects of inflation, have dropped year-on-year for more than six months straight.

Against this backdrop, Rengo, an umbrella organization of labor unions representing primarily regular workers of large companies, set a 5-percent wage hike as the target, the largest in 28 years.

Last year’s average wage increase stood at 2.2 percent, according to the labor ministry.

After his meeting with Yoshino, Tokura told reporters that wage increases should be achieved basically through an expanded pay-scale.

Labor and management are both keen to see pay hikes this year. After struggling through many years of stagnant wages, workers are being hit particularly hard by the spike in commodity prices this year.

Many labor unions will begin making their demands for pay raises in February.

Most large companies are expected to give their answers in the middle of March.

(This article was written by Jumpei Miura and Hideki Aota.)

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