Nippon Keidanren ( Japan Business Federation) said on January 20, 2010 that the freezing or postponing of automatic wage increases may become a hot topic at this spring's annual wage negotiations. This is the first time in six years for its annual report, which serves as a guideline for spring wage negotiations with unions, to include such a grim forecast. The annual report, is usually announced in December, but the release was delayed by a month this year to enable Keidanren to gauge economic trends right up to the last minute. Using this guideline, Keidanren is scheduled to enter talks with the nation's largest labor organization, Rengo, towards the end of January 2010.
"Business conditions are more severe than last year and there is concern that companies will become even weaker with the deflationary situation," Keidanren Vice President Yoji Ohashi said at a recent news conference. "Although we're not recommending cuts to basic monthly pay, it's possible that automatic pay raises will be frozen or postponed." Automatic annual wage increases are based on workers' ages and the number of years they have worked at a company.
Keidanren did not touch on automatic pay hikes in its 2009 report, which was compiled amid an economic slump triggered by the financial crisis that struck in the fall of 2008. But major electronics manufacturers and other firms froze automatic wage raises after citing poor earnings.