January 23, 2020

The Japan Business Federation (Keidanren) on January 21 in its annual report expressed its intent to force more workers to work as non-regular workers and called for shifting from the current system of wage hikes through spring wage offensives (shunto) to one focusing on individual wage bargaining.

The report, known as the business circle’s strategy for the spring wage struggle, is compiled every year by the Keidanren Committee on Management and Labor Policy.

Keidanren in this year’s report proposed to put an end to the present long-term employment system and instead introduce fixed-term employment systems, such as a “job-based” hiring system, with the aim of creating a flexible and diverse labor market. This proposal appears to be the same as the 1995 proposal by the Japanese Employers’ Federation (Nikkeiren, currently Keidanren) demanding government measures to convert regular workers to non-regular workers. In line with the Nikkeiren proposal, the government promoted labor deregulation, which led to an increase in the number of workers working in non-regular positions. These workers now make up 40% of the Japanese working population.

Furthermore, Keidanren called for wage restraint by saying that as a fundamental principle, each company’s pay scale should be decided based on its ability to pay under an appropriate labor cost management scheme. In addition, Japan’s largest business organization expressed its desire to get rid of the current system to raise basic wages through annual spring labor-management negotiations and insisted on the introduction of a pay raise system centering on negotiations with individual workers based on their performance appraisals.

Meanwhile, unlike last year, Keidanren’s report mentioned nothing about the internal reserves hoarded by large corporations.

The statistical data that the Finance Ministry published in December 2019 showed that the amount of internal reserves of large corporations with more than one billion yen in capital exceeded 456 trillion yen. The use of only 2.95% in internal reserves held by all corporations would lead to a 25,000-yen monthly wage hike as demanded by the National Confederation of Trade Unions (Zenroren).

The 2020 spring wage offensive began amid growing unions’ demand for living wages. The Tokyo Regional Council of Trade Unions (Tokyo Chihyo) at the end of 2019 released the results of its survey on the cost of living which showed that 25-year-old male workers living alone in Tokyo need to earn 250,000 yen a month and 1,700 yen an hour as a living wage to cover their basic needs.

In order to win a decent wage hike in this year’s spring wage talks, the need is for Japan’s labor movement to hang on its fundamental strategy of confronting management with united efforts.

Past related article:
> Youth march for minimum wage hike to 1,500 yen across Japan [December 23, 2019]
> Worker-oriented reforms plus \25,000 wage hike will push up GDP by \34.8 trillion: Labor thinktank [January 17 & 21, 2019]