Tokyo: The Japanese Trade Union Confederation, or Rengo, on Thursday formalized a plan to demand a pay hike of around 5 pct in next year’s “shunto” spring labor-management negotiations.

The lifting of the target for pay-scale and regular salary growth from around 4 pct set for 2022 negotiations is aimed at having wages reflect higher prices stemming from the yen’s rapid depreciation and other factors, which have been weighing on household finances.

The pay hike target had stayed at around 4 pct since 2016.

Rengo’s decision was made at the day’s central committee meeting held in Urayasu, Chiba Prefecture, east of Tokyo.

Specifically, Rengo plans to seek a pay-scale increase of around 3 pct, up from around 2 pct demanded in recent years, making a pay-scale hike request for the 10th consecutive year.

Even if the 2023 demand is met, however, the pace of wage increases may not catch up with that of price hikes after the country’s core consumer price index, which excludes often volatile fresh food prices, in October rose 3.6 pct from a year before, faster than the pay-scale hike sought by Rengo.

“Workers in Japan are faced with the triple trouble of higher prices, the yen’s drop and the novel coronavirus crisis,” Tomoko Yoshino, president of Rengo, told the meeting.

Yoshino stressed that the management side “must surely raise wages of all workers” to prevent consumer spending from falling amid the rising cost of living.

In its basic strategy for the 2023 shunto negotiations, Rengo emphasizes that if wage increases cannot keep pace with price growth for a prolonged period of time, consumer spending is feared to plunge and a serious recession may be unavoidable.

Rengo is set to strengthen measures to help small and midsize companies pass on higher prices to consumers appropriately, aiming to realize such firms’ wage increases.

Labor unions under the wing of Rengo will adopt their own shunto policies based on the umbrella body’s latest plan, with labor-management negotiations scheduled to go into full swing in February next year or later.

JIJI Press