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
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.