Japanese Prime Minister Fumio Kishida is set to meet with the head of the country’s largest labor union as well as business leaders on Wednesday, as he tries to encourage employers to raise wages.
(Bloomberg) — Japanese Prime Minister Fumio Kishida is set to meet with the head of the country’s largest labor union as well as business leaders on Wednesday, as he tries to encourage employers to raise wages.
The meeting represents the first formal gathering of leaders from government, labor and business in eight years, and comes as annual “shunto” wage negotiations reach an initial conclusion this week. The wage talks have been attracting extra attention since Kishida called on companies to boost pay as part of his so-called “new capitalism” policy, asking for raises that exceed inflation which is at a four-decade high. The main union, Rengo, had called for a wage hike of around 5%.
The Bank of Japan is also looking for higher wages to time an exit from its massive easing program. If bigger paychecks eventually trigger normalization at the central bank, it could jolt investors across the globe.
Larger firms have already announced wage hikes, with Hitachi Ltd. accepting its labor union’s demand for a 7,000 yen ($52) monthly raise — more than double last year’s increase. Panasonic Corp. and Toshiba Corp. also agreed to raise pay by similar amounts. It’s unclear, however, whether smaller employers will follow suit.
“We’re seeing strong wage hike moves led by large companies,” Chief Cabinet Secretary Hirokazu Matsuno told reporters earlier Wednesday. “As the spring wage negotiations comes into full swing for smaller firms and in the regions, we need to get this momentum to spread to these companies too.”
In further signs of growing confidence to hike pay among bigger firms, 43 unions said they’ve managed to win wage hikes of 8,407 yen per month on average this year, according to the Japan Council of Metalworkers’ Unions. That’s the highest amount since 2014 when comparable data became available.
“The results so far look unprecedented. We could not be more pleased with the responses, which were in line with our demands,” said Akihiro Kaneko, head of the metalworkers’ union group. “The key is how far we can expand this momentum.”
(Updates with details and comments from the metalworkers’ unions)
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