The Japanese Trade Union Confederation (Rengo), Japan’s largest trade union, has indicated its intention to demand a 5% pay increase in the forthcoming annual wage talks in the spring of 2024. This action underscores the union’s continuous efforts to address the problem of chronic inflation, which has undermined the buying power of employees’ pay.
Rengo has established a target of 5% or more overall pay increase, including a 3% or more base-pay increase, in its core strategy for the 2024 annual wage talks between enterprise unions and employers. This is a strong position in comparison to the union’s proposal for a “around 5%” wage increase in the 2023 discussions.
Rengo CEO Tomoko Yoshino stressed that the 5% objective is the “minimum line,” pushing higher-performing organisations to aspire higher. She did point out that due to increased raw material costs and economic concerns, smaller enterprises may find it more difficult to accomplish larger wage increases.
The Chairman of the Japan Chamber of Commerce and Industry was alarmed by Rengo’s plan. He feels that meeting such expectations may be tough for medium-sized businesses.
Rengo is also asking for a minimum hourly wage of 1,200 yen (US$8.01) or higher, a 50 yen (US$0.33) rise over the 2023 negotiations. The purpose of this approach is to narrow the pay gap between regular and non-regular employees.
The demands of the union come as consumer prices in Japan exceed wage growth. Therefore, this puts employees’ budgets under pressure. In August, core consumer prices in Japan rose 3.1% year on year, marking the 24th month of growth. Meanwhile, real wages have fallen for the 17th consecutive month.
Wage discussions are likely to conclude in March 2024, when large corporations will determine how to respond to labour union requests, according to Japan Today.
