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Keidanren to Rengo: No raises

Kyodo

Annual wage negotiations got under way Tuesday as leaders of the nation’s most powerful business lobby and the biggest umbrella labor body met in Tokyo to discuss pay for the coming business year.

Tough negotiations are expected following the meeting between Keidanren Chairman Hiromasa Yonekura and Japanese Trade Union Confederation (Rengo) President Nobuaki Koga, as the business federation has suggested that seniority-based regular wage increases for each worker may be frozen or delayed.

Rengo is seeking a 1 percent hike in overall pay in the month-long “shunto” spring labor-management talks, while the new government of Prime Minister Shinzo Abe aims to boost private consumption to lift the ailing economy out of chronic deflation.

However, Keidanren has argued in its policy report for the coming round of wage talks that Rengo’s demand “ignores the real condition” of the economy.

At the outset of the meeting, Yonekura said “bright signs” in the economy have emerged since the launch of the Abe administration in December, such as the yen’s weakening against other major currencies and the rebound in Tokyo stocks.

But the chairman went on to say labor and management “need to share a sense of crisis more than ever and engage in constructive discussions,” warning against the pay raise demand by Rengo.

Koga said workers on the ground supported business management and social foundations amid deteriorating conditions following the March 2011 disasters in the Tohoku region.

“Now is the time for management to switch its policy and invest in personnel resources,” he said.

Koga told reporters after the meeting that Keidanren’s plan to rethink the seniority-based regular wage increases due to a temporary downturn in business “could undermine the existing relationship of trust between labor and management.”

The 6.8 million-strong labor body has also requested that nonregular workers be hired as regular employees and that rules on their wage increases be clarified to realize hourly pay of ¥1,000 for everyone employed on a nonregular basis.

Keidanren has dismissed the request, saying management has raised wage levels for nonregular workers to a certain extent.

Major unions are slated to present their wage demands from around mid-February and receive replies in mid-March.