Japan’s annual spring talks between unions and management on wages and working conditions started Thursday with no tension apparent but with the spreading pay gap between major and smaller companies expected to draw attention.
Companies that have benefited from economic recovery have money enough for pay increases. But more than half of the labor unions in big companies plan to make no demand for basic wage increases this spring, union sources said.
At a labor-management forum sponsored by the Japan Business Federation (Nippon Keidanren) in Tokyo on Jan. 13, Kiyoshi Sasamori, president of the Japanese Trade Union Confederation (Rengo), told some 400 company executives, “The large sacrifices and contributions of employees have supported this business recovery,” indicating the confederation will seek better wage deals than those of last year.
At a New Year’s news conference, Sasamori said, “I don’t think the management side will talk about cutting wages” this year. Last year, he reacted bitterly to the business federation after it called for wage cuts.
No sense of crisis was observed in Sasamori’s statements this year because some enterprises are ready to allow wage increases due to economic recovery.
“It is natural that stable growth is reflected in salaries. Enterprises with good performance can raise wages,” said Taizo Nishimuro, Keidanren vice chairman, citing as examples steel and shipbuilding companies, which have benefited from China’s economic growth.
Rengo, the largest union confederation in Japan, decided in November on its labor talks policy for this spring. Rengo for the fourth consecutive year will not seek a uniform basic wage increase but will ask management, as it did last year, to retain the long-standing “wage curve” of incremental increases with seniority.
Demand for a uniform basic wage increase is now muted in Rengo, with most officials instead favoring large bonuses for employees of enterprises that are doing well. Reflecting this, the unions and management of the electrical machinery industry have agreed on increases in bonuses.
An industry executive said, “It is common now to make a return in bonuses rather than in basic wages.”
Toyota Motor Corp. President Fujio Cho on Thursday indicated that the company was willing to fully grant its labor union’s demand for bonuses this spring.
“Fruitful efforts must be duly rewarded,” Cho said during an interview. “Wages and bonuses will not be a focal issue” in the coming wage talks, he said.
Toyota’s labor union is ready to demand record-high biannual bonuses this year that will average about 2.4 million yen per worker, but forgo a pay-scale increase.
The per-head annual bonus in the steel industry was about 1.4 million yen during its worst period. But this year’s bonus is expected to be more than 2 million yen.
A union executive said: “Union members are not happy with a basic wage increase of 500 yen to 1,000 yen. But they like a bonus increase of several hundred thousand yen.”
Although the workers in most big companies will get bonus increases, those of smaller companies and part-time workers are not expecting much. Many smaller firms cannot even raise regular wages.
A survey by the Health, Labor and Welfare Ministry showed that the average wage for employees at major enterprises rose about 1 percent in 2003, but those at smaller companies dropped 0.8 percent. The hourly wage for so-called part-timers, who often work full time but get fewer benefits, is half the amount of regular male workers.
Rengo will demand a wage increase of more than 5,700 yen per month for employees at smaller companies and an increase of more than 10 yen per hour for part-timers.
“Due to personnel cuts at workplaces, only work is increasing. We will have to get an amount of money equal to that at major companies,” said Keiichi Tajima, secretary general of the National Union of General Workers.
The situation is severer for part-timers.
“This spring’s labor talks have no meaning for part-timers,” said Momoyo Kamo, chairwoman of the Japan Federation of Community Unions, which is made up of regional unions.
The peak of the labor negotiations in March is a period when part-timers have to renew their contracts, and they cannot think of pay increases, she said.
Statistically, more than 30 percent of workers are not regularly employed.
At a supermarket chain whose workers are mostly part-timers, wages of regular employees have been cut, along with those of part-timers.
Only some 3 percent of part-timers are organized. “We will have to convince them that if they join unions, they can get wage increases in renewing contracts, and the union will fight for them,” Kamo said.
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