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In Japan, groundbreaking wage hikes after 33 years


On March 13, many major companies in Japan made groundbreaking offers to trade unions in regard to wage increases. According to the Japanese Trade Union Confederation, RENGO, as of March 15, the average wage hike rate amounted to 5.28%. This marks the first time in 33 years that the average wage hike has surpassed 5%.

Examples include Hitachi raising the average wage by 13,000 yen, a 5.5% increase; IHI with an increase of 18,000 yen, or 6.72%; and Nissan Motor with a 18,000 yen increase, or 5.0%. Additionally, part-time workers also saw wage increases, with Aeon offering around a 7% increase in hourly wages.

In Japan, stagnant wage growth for workers over the last 20 years or so has brought about sluggish consumption and hindered economic growth. In this year’s wage negotiations, not only trade unions but also management and the government recognized this issue and jointly pushed for companies to increase wages. Furthermore, due to their correlation with government economic policies, this year’s wage negotiations garnered significant attention.

Tomoko Yoshino, president of RENGO, stated during a press conference on March 15, “I believe this wage hike marks the first step for Japan to transition into a new stage of its economic and social development.” She also emphasized that, “A crucial task for us moving forward is to ensure wage hikes for workers in small- and medium-sized enterprises (SMEs), which account for over 70% of employment in Japan.”

Moreover, there have been public demands for large companies to allow price increases from subcontractors, in order to facilitate wage increases at SMEs. On March 13, the Prime Minister’s office hosted a high-level tripartite meeting among government, trade unions, and employers, which reaffirmed the demands that large companies respond to this issue.

Labour?management wage negotiations in Japan may continue at SMEs until around May. In those negotiations, it is crucial that wage hikes for non-regular workers, who account for over 40% of the workforce, are also addressed. Subsequently, negotiations regarding raising the minimum wage are also expected to take place.