This year's spring wage-bargaining season has barely started and a sense of confrontation is already in the air. The Japanese Trade Union Confederation (Rengo) has called for a 2 percent increase in the "regular pay hike" plus at least a 1 percent increase in basic pay. The Japan Federation of Employers' Associations (Nikkeiren), on the other hand, has let it be known that a pay raise would be out of the question for many firms this year and has strongly suggested that labor should accept a pay cut if it wants the workforce kept at current levels.
Under the radically changed economic conditions that have resulted from nearly a decade of stagnation, however, it would be unconscionable if labor and management continue their shadow boxing and neglect to undertake a thorough review of Japan's employment and pay practices. The time has come for labor and management to lay out a new employment strategy, as Japan's heralded lifetime employment system is being put to a crucial test in this changed economic environment.
Adding to the woes of workers approaching retirement age, the government has decided to push back the age at which they are qualified to begin receiving social-security benefits, in order to save the cash-strapped pension system. Starting from April next year, retirees will not be eligible for a full pension until they reach 61, instead of 60 as at present. What is more, the qualifying age will be gradually extended to 65.