Keidanren Vows to Lead Wage Hike Efforts

Tokyo, Jan. 20 (Jiji Press)–The Japan Business Federation, or Keidanren, said Tuesday that it will lead efforts to ensure that the momentum for wage increases takes even deeper root in Japan. In its guidelines for member companies regarding this year’s “shunto” spring wage negotiations, released the same day, the country’s largest business group said that pay scale hikes should be considered “the standard for wage negotiations.” “Continuous wage hikes are necessary to strengthen the Japanese economy,” Keidanren Vice Chairman Hitoshi Nagasawa said at a press conference. He added that the group is basically heading in the same direction as the Japanese Trade Union Confederation, or Rengo, an umbrella organization for labor unions in the country, which has decided to seek wage increases of at least 5 pct in this year’s shunto. The guidelines said that considering implementing pay scale increases would be a “key pillar” in shunto talks, in terms of maintaining workers’ living standards and securing labor amid inflation. Keidanren floated ideas such as allocating a greater share of pay based on employees’ contributions and giving younger workers larger wage hikes by providing a fixed-amount payment to all employees. The group also expressed hope that a “virtuous cycle of wages and prices” in which inflation stabilizes at an annual rate of around 2 pct will be achieved through the policies of the government and the Bank of Japan. This would make real wages turn positive, allowing both companies and workers to feel the benefits of wage hikes, it said. To ensure wage hikes take root at small businesses, which employ about 70 pct of Japan’s total workforce, Keidanren stressed the need to make companies comply with the law on proper transactions with small and midsize contractors, which took effect on Jan. 1 through the revision of the subcontract law, and enable firms across supply chains to raise prices to reflect growing costs. END [Copyright The Jiji Press, Ltd.]