Japanese Trade Union Confederation (Rengo) President Nobuaki Koga said it is necessary for companies to raise employee wages to help the country out of deflation.
“Wage deflation is a major factor that leaves the country in prolonged deflation,” Koga said Tuesday.
Rengo hopes to reverse the deflationary spiral through cooperation by the government, employees and employers, he said, noting the economy has fallen into a vicious cycle in which lower wages lead to less consumption and lower prices, forcing companies to reduce wages as part of cost cuts.
Koga held talks Tuesday with Hiromasa Yonekura, who as Keidanren chairman heads the nation’s largest group of employers, to mark the start of the “shunto” spring wage negotiations between labor and management. Koga said the outlook for the negotiations is severe, explaining that while sentiment has been improving due to higher stock prices and the yen’s fall, domestic companies have yet to experience a tailwind.
He also expressed concern about Prime Minister Shinzo Abe’s push for drastic monetary easing to overcome deflation. “Even if prices increase, our society will be upset unless people’s income grows,” Koga said.
Meanwhile, the labor leader said it would be impossible to accept Keidanren’s request to rethink seniority-based regular wage increases, arguing it is a system created through time-consuming discussions between unions and management. The request to rethink the system could shatter trust between the two sides, he warned.
Koga said it is uncertain how Abe’s call for higher wages will affect the shunto talks. Wages are determined by labor and management alone, and no third party should intervene, he stressed.
Toyota bonus demand
Toyota Motor Corp.’s unionized workers are planning to seek an average of more than ¥2 million in annual bonuses in this year’s “shunto” wage negotiations, up from ¥1.78 million they demanded in 2012 and in line with the firm’s recovering earnings, union sources said.
It is the first time in five years that the Toyota Motor Workers’ Union will demand in excess of ¥2 million in employee bonuses. The union is planning to formalize its decision in February before negotiations with management kick off, the sources said.
The union is hoping its demand will be met in full for the third year in a row.
Toyota is projecting an unconsolidated operating loss of ¥20 billion in the year ending March 31, a sharp recovery from a staggering ¥439.8 billion worth of red ink, thanks to increased new car sales and cost-cutting programs implemented with parts makers.
The union, however, is not planning to seek a pay-scale raise for the fourth straight year, given the economy is still in a deflationary mode, according to the sources.