Keidanren, Japan’s largest business lobby, is urging major corporations to consider salary increases with “more enthusiasm and determination than this year,” indicating its plan to pursue pay rises of more than 4% in the forthcoming annual wage discussions.
This decision comes amid increasing inflation and a growing agreement in Japan that businesses must do more to increase wages and promote consumer spending.
This year’s average pay increase at big member organisations was 3.99%, the highest in 31 years. However, when prices rise quicker, labour unions are pressing for even larger pay rises next year. Rengo, Japan’s largest labour union, has stated that it will want a 5% pay raise, while UA Zensen, the country’s largest industrial union, has requested a 6% salary increase.
The Keidanren (Japan Business Federation) draft recommendations do not include a particular numerical objective for salary rises. It did, however, identify 2024 as “an extremely important year for achieving sustainable wage growth.” The guideline also underlined the significance of pay-scale hikes, which can deliver a larger long-term boost to employees’ earnings than one-time incentives.
In addition to advocating for higher salaries, Keidanren urges the government and the Bank of Japan to direct monetary policy towards achieving an appropriate level of inflation. Despite exceeding the central bank’s 2% inflation target, inflation rates have recently rose due to the yen’s depreciation and the current situation in Ukraine.
The Japan Times reports that the guideline also emphasised how important it is to raise salaries at small and medium-sized businesses. This is where around 70% of all Japanese workers are employed. Therefore, to create momentum for pay hikes throughout the nation.
