Japan Press Weekly

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2017 January 18 - 24 [LABOR]

Keidanren sticks to its collapsed policy regarding wage increase

The Japan Business Federation (Keidanren) on January 17 published its policy for this year’s spring labor talks on wage hikes, known as the 2017 report of the Committee on Management and Labor Policy, and proposed wage increases on an annual basis. Keidanren adopted the same policy for four consecutive years. However, it is obvious that this policy will be ineffective not only to expand personal consumption but also to revitalize the Japanese economy.

In the report, Keidanren boasted that workers’ wages increased drastically in terms of annual income over the past three years. On the other hand, it stated that personal spending on goods and services which is the primary engine for a vigorous economic cycle remains stagnant.

Explaining the reason for sluggish consumer consumption, the report cited that Japan’s falling birth rate and other social factors have caused the general people anxiety about the future. It is Keidanren’s policy to raise wages through bonuses, one-off payments, and allowances which causes workers to worry about their future. The amount of bonuses and lump-sum allowances depends on business performance, leading to ups and downs in the amount of workers’ annual income. In contrast, an increase in base wages will ensure a steady monthly income for workers and thus will contribute to increasing personal consumption.

The National Confederation of Trade Unions and its partner unions in this year’s spring wage struggle will seek to win a monthly pay increase of at least 20,000 yen and an increase of over 150 yen in hourly wages for all workers. A substantial wage hike is essential to boost consumer spending.

In the report, Keidanren also expressed its view on Prime Minister Abe’s labor policy regarding a reform of work practices. Keidanren referred to the necessity to revise overtime rules for restricting excessively long working hours which attracted public attention due to the suicides of overworked workers at a major ad agency and an electric power company. However, it showed its intent to introduce another measure to force workers to work excessively long hours. Japan’s biggest business lobby opposed Abe’s “equal work, equal pay” policy, saying that regular workers normally shoulder heavier job responsibilities and burdens than non-regular workers.

Past related article:
> Keidanren in wage negotiation guidelines takes hostile stance toward elimination of wage gaps [January 20, 2016]