Japan Labor Union Seeks Pay Hike: Updated October 30, 2024

Japan's largest labor union to seek pay hike of at least 5% next year

Article Source: https://mainichi.jp/english/articles/20241018/p2g/00m/0bu/053000c

Ideas:

Its good that the biggest trade union want higher wages to help their workers but also to help small and mid-sized companies too get higher wages, as they are often overlooked compared to large companies.

The challenge might be that small and mid-size companies can't afford the higher wage increase as they are probably already challenged by increased labor costs and increased material costs, not to mention increased energy costs.

Small and mid-size companies might want to pay their workers more but their profit margins are just too thin to do it.

Rengo might have good intentions but they don't see or speak exactly for each small company as each small company, while wanting higher wage increases to get more talent working for them, but maybe they are unable to pass-on their costs to the next in the supply chain, as customers and other companies might not like it that much.

The problem also might be some or many of these small companies are suppliers to larger companies which have more market power and can easily or not easily due to contracts, tell a small company we don't want to pay for the increase cost you are passing on to us.

Rengo may or may not have the market power to get large companies to agree to the passing-on of the costs of smaller companies, but they should try to make sure it can be done.

For many years, many Japanese companies either gave minimal wage increases or no wage increases at all, as that was the norm in much of Japan since 2000.

The small firm increase of 4.45 percent was not bad but it wasn't good too, as inflation added up each month, probably was more than that.

Large companies of course in most sectors are the market leaders and what happens in negotiations with large companies trickles down to the mid-size and small companies and they usually get wage increases a little less than what large company workers get.

Have a nice day!