Japan Labor Union Wage Demand:

 Article Source:

 https://mainichi.jp/english/articles/20221202/p2g/00m/0bu/003000c

Article: 

TOKYO (Kyodo) -- Japan's largest labor union decided on Thursday to demand a pay hike of around 5 percent in annual wage negotiations starting next spring, the highest in 28 years, to catch up with rising inflation.

The Japanese Trade Union Confederation agreed to ask for the 5 percent pay rise, including a base-pay increase of around 3 percent, and call for a minimum hourly wage of at least 1,150 yen ($8), the same level as 2022 annual negotiations.

The request, the highest since a range of 5 to 6 percent sought in 1995, reflects tepid wage growth over the past decades in Japan that have hardly kept up with soaring inflation. Wage growth remains sluggish in Japan even after rebounding from a recent low of around 1.6 percent among major companies in 2003.

Ideas:

Japan's largest labor union  may try for higher wages but it's unlikely they will actually get a 5 percent increase.

Of course they want to match or catch up with inflation but companies have other concerns these days.

The environment is much different that what is was in 1995, as companies back then were more employee friendly but these days it seems to be focused on shareholder value and or maintaining a certain profit margin which might not include wage increases or at least at the level that the trade union is looking for.

Article:

The union, also known as Rengo, had consistently called for a 4 percent pay hike in spring negotiations from 2016 to 2022.

"It is Rengo's duty to revive the economy by raising wages, which would boost consumption," said Tomoko Yoshino, head of the union, stumping in front of JR Shimbashi Station in Tokyo to promote the union's call to passersby that day.

Workers won an average raise of 2.07% to base and seniority-linked pay together in wage talks this year, according to the union. The figure compares with a 3.6 percent jump in Japan's October core consumer inflation from a year earlier, the fastest pace in about four decades.

Ideas:

It seems like it would be the duty of both companies and rengo to act in unison to find ways to boost consumer spending.

Of course increasing wages it a good start but the wage increase has to be large enough that consumers/workers feel good about the increases and it improves their extra or disposable income. Until that happens consumer spending is not going to be where it should be in Japan.

With consumer inflation increasing 3.6 percent and wages increased on average only 2.07 percent, that is still not enough to keep workers or consumer happy and as a result they will continue to be constrained in their consumer spending.

Article:

The Japan Business Federation, the country's biggest business lobby known as Keidanren, is considering urging their member companies, consisting of many major firms, to increase wages.

But it remains uncertain how far companies can meet the union's demand. The business environment has become increasingly difficult for many industries due to rising energy costs. The yen's slide to its lowest levels in decades against the U.S. dollar also adds pressure on importers by lifting overseas purchasing prices.

Wage talks are crucial for Prime Minister Fumio Kishida, who has repeatedly called on companies to raise wages to keep pace with rising prices.

Ideas:

Back in day, in the 80's and earlier, companies maybe were not so concerned with overall profit and they could always go their bank and get what they needed to keep going.,

But in today's environment, companies have become too western, for lack of a better term and banks no longer allow for zombie companies to just run to the bank whenever they had a problem.

Also companies today are more focused on maintaining shareholder value and profit projections and not so concerned with keeping employees happy.

And not add in the weak yen, increased energy and supply costs and it makes it even more difficult for companies even if they wanted to, to increase wages.

Article:

Inflation has become a major challenge for the premier, who has faced a sharp drop in support ratings.

Wage negotiations will culminate in March when major companies decide on their responses to their labor unions' requests.

Ideas:

Prime Minister Kishida of course wants wage increases to grow the economy but companies might or might not be able to do anything about it, no matter how much he asks.

Companies in March might decide to some kind of compromise but most likely not the 5 percent the trade union is asking for. 

Companies might agree to 1 to 3 percent wage increase at the most to try and keep the unions happy.

Perhaps everyone is not expecting much in March as wage increases in previous years have not been that robust. 

Have a nice day and be safe!