Business

Federation of Japan auto labor unions won't seek unified base pay hike

Kyodo

A group of Japanese automobile workers’ unions decided Thursday that each union should set a specific monthly payment target for the annual labor-management wage talks this spring, instead of seeking a unified base pay rise as it has done in recent years.

The decision by the Confederation of Japan Automobile Workers’ Unions came as a labor union of the industry’s trendsetter Toyota Motor Corp. is considering engaging in the upcoming shuntō spring negotiations without presenting a specific base pay hike target, which has so far served as a bellwether for other companies.

Small and medium-sized companies in Japan generally refrain from raising base wages by more than Toyota does, which critics say may lead to the cementing of existing disparities between the pay of employees of larger and smaller companies.

The confederation decided that placing too much emphasis on base pay hikes may not necessarily benefit its members, as the level of the monthly base salaries is already different according to company size.

It is the first time since the spring wage negotiations in 2014 that the confederation, joined by federations of unions of Toyota and other major automakers and with a membership of around 779,000, will not set a numerical target for a pay-scale hike.

In the previous spring wage negotiations, it decided to demand a monthly base wage hike of ¥3,000 ($27) or more.

Prime Minister Shinzo Abe has been calling on companies to raise wages to beat the country’s chronic deflation and ensure the revival and sustainable growth of the economy.

In December, Abe again asked companies to hike wages on the back of concerns that the October sales tax hike from the current 8 percent to 10 percent could dampen consumer spending and business investment.

But many companies remain cautious about reducing their cash reserves to increase wages.

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