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Keidanren to back pay-scale hikes for second straight year

Kyodo

The nation’s leading association of business leaders said Tuesday it will support pay-scale hikes by member companies in the upcoming annual wage talks, adopting the policy for the second straight year.

But the Japan Business Federation, better known as Keidanren, showed reluctance to accept a request from the nation’s largest labor union to raise pay by at least 2 percent uniformly across industries, saying the demand “doesn’t match reality.”

A Keidanren panel released a report that will be used as guidance by corporate executives in the wage negotiations set to begin later this month, saying that any pay-scale increase will be “one of the options in raising salaries.”

“I hope as many companies as possible will raise pay,” Koji Miyahara, Keidanren vice chairman, told a news conference after the report’s release.

Given the robust earnings of many domestic firms, Prime Minister Shinzo Abe has been urging business leaders to raise workers’ salaries and aid his initiative to revive the economy, in which demand has been falling since last April’s the 3 percentage-point consumption tax hike.

Last year, more companies than before followed the government’s efforts to tame chronic deflation by lifting pay to an extent not seen in previous years, even though this led to an increase in fixed costs.

But many other firms hope to forgo pay hikes and instead increase bonuses and other lump-sum payments as a way of rewarding employees for improving business results.

This year’s wage talks come amid increasing burdens particularly on smaller firms due to higher raw material and other import costs resulting from the sharp depreciation of the yen against other currencies.