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Japan’s biggest labor union said COVID-19 won’t stop it demanding pay increases for its 7 million members, even after the worst year for corporate profits since the global financial crisis.

Rikio Kozu, head of the Japanese Trade Union Confederation known as Rengo, indicated in an interview Tuesday he’ll push for a 4% wage increase, including base pay, even though rising waves of the coronavirus are darkening the outlook for employers.

“If we say wage growth is impossible this time because of COVID, then we’ll be totally neglecting our responsibility to the economy,” said Kozu. “There is a serious concern” that Japan could fall back into deflation without pay gains, he said.

Meager raises for workers even during times of relative prosperity have made it hard for Japan to escape a damaging cycle of weak prices and low growth. With virus infection rates at new records and companies including Toyota Motor Corp. forecasting profits down sharply from last year, pay increases will be much harder to win this time than usual.

Some companies argue that keeping a lid on wage gains has put them in a better place to deal with the crisis and protect jobs. Unemployment remains low by global standards at 3%.

Rengo is gearing up for its annual spring wage negotiations amid heightened uncertainty over the economy’s recovery and corporate performance with the virus surging again. Japan reported a record of more than 2,000 new cases Wednesday, and the capital is preparing to raise the city’s virus alert to its highest level, according to local media.

Rengo demanded a 4% raise at wage talks this past spring, before the pandemic heated up, but secured an average gain of just 1.9%, the smallest bump in seven years.

Next year could be worse. Mitsubishi UFJ Research & Consulting sees winter bonuses plummeting 10.7% compared with last year, a bigger drop than in 2009.

Bank of Japan Gov. Haruhiko Kuroda, speaking in the Diet on Wednesday, said prolonged periods of sluggish wage growth is a reason inflation is running so far below the bank’s 2% target. Data due Friday is expected to show core consumer prices last month fell deeper into negative territory.

Kozu said backpedaling on wage goals for his members, who make up 12% of Japan’s employees, isn’t an option because that would worsen public sentiment and do long-term damage to consumer spending, which accounts for more than half the economy.

“If the economy breaks down, so much effort that has been made so far will be in vain,” he said. “The economy will be worse than before. That’s a hopeless place to be.”

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