Annual spring wage negotiations between companies and labor unions got into full swing Wednesday with unions from Japan’s major automakers demanding the same base wage increase as last year despite concerns about the industry’s earnings prospects.
The unions of Toyota Motor Corp. and Fuji Heavy Industries Ltd., among other major automakers, requested a ¥3,000 monthly hike.
The demand comes as some of the leading automakers recently reported sluggish earnings for the nine months to December, with concern growing about U.S. President Donald Trump’s protectionist policy stance.
Auto and electronics makers also face uncertain business conditions because Britain is preparing to begin negotiations this spring on its departure from the European Union and China is experiencing slowing economic growth.
Prime Minister Shinzo Abe has been urging businesses to raise wages to help boost the country’s economy and the head of Japan’s top business lobby has called on companies to increase remuneration on an annual basis, not necessarily sticking to base wage hikes.
“I hope to see positive outcomes from the spring’s wage talks,” Abe said during a meeting of the Council on Economic and Fiscal Policy held at his office.
Tepid private consumption has been a bottleneck for the country’s economic growth as consumers remain reluctant to increase their spending. Japan has yet to see what Abe has described as a virtuous cycle of wage growth leading to increased consumer spending.
In Japan, the pace of income growth is slower among people in their late 30s and 40s, who are often responsible for raising children, than other age brackets, according to analysis presented at the meeting.
Such people appear to have low expectations for future income growth, which thus reduces their appetite for spending, the council’s private-sector members said as they called for measures to be taken.
The labor unions of major electronics makers will submit their wage requests by Thursday.