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This spring’s wage negotiations started Wednesday as Hiromasa Yonekura, chairman of the Japan Business Federation (Nippon Keidanren), and Nobuaki Koga, president of the Japanese Trade Union Confederation (Rengo), met in Tokyo to discuss labor conditions.

Tough battles are expected in the “shunto” annual labor negotiations as business managers seek to place priority on job security while the economic outlook remains uncertain due in part to prolonged deflation and the strong yen, while employees are calling for pay increases.

Rengo, the nation’s largest umbrella labor body, is seeking a 1 percent raise in total payroll for workers, including benefits and allowances, although it is set to forgo demanding a uniform pay increase.

Meanwhile, Keidanren — the top business lobby — plans to allow employers to maintain regular pay hikes, but opposes demands for increasing overall labor costs.

During the meeting, Koga pointed out that wages have been on a downward trend since 1997.

“We cannot escape from the traps of low economic growth and deflation” if companies continue to cut labor costs, Koga said, arguing that increased distribution of corporate profits to workers could help stimulate domestic demand and boost broader economic growth.

Rengo also emphasized the need to improve the working conditions of nonpermanent employees and urged management to promote the employment of more women.

But Yonekura said business circumstances continue to be harsh. “We remain in a situation where it is difficult to expect a self-sustaining economic recovery because of persistent deflation and other (factors),” he said.

Among the factors behind deflation, Keidanren blamed the shrinking domestic market, aging population, lower birthrate and stiffer global competition, countering Rengo’s argument that increasing labor costs would help overcome falling prices.

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