Tokyo: Japanese Prime Minister Fumio Kishida on Monday called for larger pay increases this spring than a year before to ensure that wages are raised at a faster pace than inflation.

Kishida made the comments when government, business and labor representatives met to discuss ways to achieve sustainable pay increases at this year’s “shunto” spring wage talks, set to begin this week.

The participants mainly discussed progress in efforts to help small businesses pass on rising costs to customers to secure funds for wage increases.

In addition to Kishida, the participants included Masakazu Tokura, chairman of the Japan Business Federation, or Keidanren, and Tomoko Yoshino, president of the Japanese Trade Union Confederation, or Rengo.

It was the first time for the three sides to meet to discuss wage increases since last November, and the third time since Kishida took office in October 2021. It is unprecedented for such talks to be held in January, when shunto begins.

Kishida’s goal of fully overcoming deflation rests on whether wages can be raised at small businesses, which account for roughly 70 percent of the country’s employment, as well as continuing high levels of hikes at major firms.

At Monday’s meeting, Kishida called on parties concerned to abide by guidelines set out in November to ensure companies pass on rising labor costs to customers.

The 2024 shunto is set to begin with a labor-management meeting Wednesday. The outcome may significantly affect the Japanese economy and people’s livelihoods as the Bank of Japan is closely watching the talks to determine whether to end its negative interest rate policy.

JIJI Press