Exchange of Views among Government, Labour and Management Held  27 Nov 2025

An exchange of views among government, labour and management was held at the Prime Minister’s Office on November 25, attended by representatives of the government, RENGO (Japanese Trade Union Confederation), Keidanren (Japan Business Federation), and other economic organizations. RENGO President Yoshino and General Secretary Jimbo attended, with President Yoshino presenting opinions on the importance of wage increases and building a supportive foundation.

(RENGO – Remarks by President Yoshino)
The government and RENGO share a common goal: creating an environment that enables wage increases and improves real incomes. While high wage hikes have been achieved in the 2025 spring labour offensive, smaller enterprises still lag behind. With real wages having declined for three consecutive years, few citizens feel their living conditions are improving. To promote economic growth and enhance livelihoods, widespread wage increases that exceed inflation are essential. This requires strong cooperation among government, labour, and business, including regional efforts.

The enforcement of the Act on Ensuring Proper Transactions must serve as a catalyst to strengthen price pass-through practices and support for small and medium-sized enterprises. In healthcare, care-giving, welfare, and childcare sectors, wage increases remain inadequate; policies and funding should be secured without waiting for compensation reforms. Excessive focus on shareholder interests in corporate governance must be reexamined to promote human capital investment and enhance corporate value.

While issues such as karoshi (death from overwork) and long working hours persist, deregulation—such as relaxing limits on overtime or expanding discretionary labour systems—is not the solution. What is needed is ensuring wages that allow workers to live securely without undertaking overtime, as well as robust reduction of working hours as part of a true “work style reform.”

(Keidanren – Remarks by President Tsutsui)
Keidanren has positioned base wage increases as a “standard” in wage negotiations and considers them a social responsibility for companies in the 2026 spring labour talks. The goal is to solidify the current momentum for strong wage hikes and contribute to a stable positive trend in real wages under moderate inflation.

Management mindsets must shift, promoting wage increases as part of a balanced approach including capital investment, R&D, and human capital. For stable resources to support wage hikes, raising labour productivity is essential. This should be achieved by encouraging labour mobility and flexible, autonomous work styles, particularly through the expansion of the discretionary labour system.

(Remarks by Prime Minister Takaichi)
Prime Minister Takaichi expressed gratitude for the understanding shown toward the government’s policy of creating an environment enabling continuous wage increases. On November 21, the cabinet approved a comprehensive economic package focused on thorough price pass-through including government procurement, fair trade practices, 1 trillion yen in support for SMEs, and expanded use of investment funds for growth, including wage hikes. The government will seek swift enactment of the supplementary budget to support these measures.

Additionally, the Headquarters for Japan’s Growth Strategy has now been established. The Prime Minister instructed that a new growth strategy be formulated by next summer, including revisions to the Corporate Governance Code that encourage human investment, R&D, and capital investment. To ensure policies reach every corner of the country, tripartite discussions will also be held in all prefectures.

The Prime Minister called on labour and business leaders to help firmly establish wage growth that exceeds inflation, especially through base wage increases, noting that the government will continue to make every effort.

Since 2022, Japan has seen the highest wage hikes in 30 years, yet rising prices have outpaced them, keeping real wages in the negative. As a result, citizens’ living standards remain stagnant and consumer demand lacks momentum.

To break away from an economy that prioritizes cost-cutting, and to build a virtuous cycle where rising incomes drive growth, recent wage hike trends must be solidified. The 2026 wage negotiations will be a critical test. Companies must center their growth strategies on investing in people, while the government must strengthen environmental support. There are high expectations that next year’s negotiations will lead to wage increases that truly improve quality of life and lay the foundation for a sustainable economy.

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