RENGO 2022 Summary of Spring Labour Struggle – Evaluation and Challenges
The results of the negotiations for wage increases of the unions affiliated with RENGO (Japanese Trade Union Confederation) in 2022 are as follows.
(Last count on July 1, 2022)
Of the unions that demanded and negotiated on the basis of an average of wage increases, including regular pay rises, 4,944 unions received responses (an increase of 172 unions compared to the same period last year). The weighted average of wage increases was ¥6,004, or 2.07% (an increase of ¥824, or 0.29 points).
The weighted average of wage increases for small- and medium-sized unions was ¥4,843, or 1.96% (an increase of ¥555, or 0.23 points).
Excluding regular pay rises, the weighted average of wage increases for 2,213 unions was ¥1,864, or 0.63% (an increase of ¥262, or 0.08 points).
The rate of wage increase among small- and medium-sized unions with fewer than 300 employees was higher than the overall rate, with 1,376 unions reporting a weighted average of ¥1,772, or 0.72% (an increase of ¥390, or 0.15 points).
The weighted average of hourly wage increases for fixed-term, short-time, and contract workers was ¥23.43 (up ¥3.52). The average of hourly wages was ¥1,047.00. The weighted average of monthly wage increases was ¥3,997, or 1.85% (an increase of ¥330, or 0.13 points), both higher than the same period last year.
Based on these results, on August 25, RENGO announced the 2022 Spring Labour Struggle Summary – Evaluation and Challenges.
(1) Overall assessment
It is commendable that 2,021 out of 5,065 unions that negotiated, or 39.9%, obtained wage increases outside of regular pay rises, which represents the second-highest rate after the 2014 struggle. Trade unions were able to play a certain role as the driving force of wage increases.
Unions called for investment in people, who are the driving power behind corporate vitality, with the slogan “Future-Building Spring Struggle.” Many among labour and management shared an awareness of the issues, with recruitment and retention of human resources becoming the focus of discussions. This year’s Spring Labour Struggle can be said to have led to progress in collective industrial relations, as well as creating a foothold for overcoming more than 20 years of deflationary economic conditions and realizing a “safe society centered on working.”
(2) Has the correction of disparity progressed?
Small- and medium-sized unions can be said to have fought well overall, with both the amount and rate of wage increases reaching their highest since the 2015 struggle. In the future, it will be necessary to examine the correction of disparity between union sizes by ascertaining individual wage levels after this struggle.
The amount and rate of wage increases for fixed-term, short-time, contract, and other workers exceeded those of ordinary union members, and took a step forward to correct the gap.
(3) Have real wages reversed?
According to the Monthly Labour Survey in FY2021, scheduled wages increased by 0.4% from the previous year, while total cash salaries also increased by 0.7% year-on-year. On the other hand, the consumer price index rose by 0.1% year-on-year in FY2021, but it has been rising almost consistently since May 2021, and the extent of the increase has also been increasing since the beginning of 2022. Therefore, in real terms after taking prices into account, scheduled wages have been negative year-on-year since February and total cash salaries since April. The long-term downward trend in real wages must be reversed through continuous wage increases.
(1) Continuation of investment in people and improvement of monthly wages
Amid the inevitable decline in the working-age population due to Japan’s extremely low birthrate and aging population, continuous investment in people is necessary to attract and retain human resources and increase the productivity of society as a whole.
In order to solve problems such as Japan’s internationally lagging wage level, long-term decline in real wages, and correction of disparities, it is necessary to remain firm on the monthly wage, which is the basis of working conditions, and to achieve appropriate wage increases.
(2) Future-Building Spring Labour Struggle
The environment surrounding the Spring Labour Struggle in 2023 is still changing significantly due to the international situation, the Covid-19 trend, rising import prices, and other factors. It is important to share an awareness of the issues from a medium-term and macro perspective, while carefully monitoring the situation, in order to put the national economy on a stable growth path and prevent it from returning to a deflationary economy.
(3) Strengthening infrastructure development efforts
From next year onwards, RENGO will further strengthen its efforts to ensure an “appropriate distribution of the added value generated throughout the supply chain” and to raise the wages of workers in small- and medium-sized enterprises, fixed-term, short-time, and contract workers to a level appropriate to the value of their work.
According to the Ministry of Health, Labour and Welfare’s “Spring wage increases situation for major private companies,” the wage increase rate in the private sector has never exceeded 3% for 29 years since 1994 after the bubble economy burst.
Even looking at the 10-year period leading up to 2022 of RENGO’s Spring Labour Struggle, the average wage increase rate was 1.99%—less than 2%.
Low wage increases have been ongoing, but the impact on livelihoods has been suppressed because of the long period of deflationary economic conditions. Recently, however, due to the rapid depreciation of the yen and the worsening energy situation, consumer prices have been rising, with particularly large price increases in energy and daily necessities. This trend is expected to continue after autumn, with real wages unavoidably falling and having a significant impact on livelihoods.
Also, as pointed out in the RENGO’s Evaluation and Challenges, wages in Japan currently lag far behind international standards. According to OECD statistics, the growth rate of real wages in Japan, when real wages in 1995 are set at 100, remains almost unchanged at 103 in 2021, 26 years later. Considering that wages in other countries have grown significantly—122 in Germany, 128 in France, 149 in the US, and 143 in the UK—the wage situation in Japan, which has remained flat for more than 25 years, is quite abnormal.
This is also taken seriously by the government’s Council of New Form of Capitalism Realization, in which RENGO President Yoshino participates. The Grand Design for a New Form of Capitalism, approved by the Cabinet on June 7, made the following recommendations regarding wage increases.
“As a major challenge for Japan, the growth of labour productivity per unit of time is not bad compared to other countries, but the wage increase is low. If wages do not increase, consumption will not increase and the next stage of growth will not be possible.
In this year’s Spring Labour Struggle, the level of wage increases, which have been declining for the past few years, has been reversed and wage increases are being realized in line with the new era of capitalism. It is important that the public and private sectors continue to work together to create a social atmosphere for wage increases. The Council of New Form of Capitalism Realization will promote consensus-building on price transfers and various work styles, and examine appropriate ways of raising wages.”
The government has also made the assessment that this year’s wage increase level signals a reversal.
However, the government, labour, and management still need to make significant efforts to catch up with levels in Europe and the U.S. We look forward to efforts to raise wages from next year.