The prospect of Japanese companies granting sharp wage increases this spring appears mixed as the annual talks on wage hikes get under way between labor and management. For the second year in a row, Prime Minister Shinzo Abe is adding pressures as well as offering incentives to the business community to boost wages. Labor unions are demanding pay raises that outpace last year's hikes. Major firms that have enjoyed record profits may be ready to comply, but others say that uniform raises are not feasible given the mixed picture of the economy.
Decisions on wage hikes, of course, should be left up to each firm according to its business plan and financial resources. Companies making profits, however, need to realize that sharing those profits with their workers and other stakeholders, including subcontractors, will spread their gains through broader segments of the economy and, ultimately, benefit themselves.
According to a tally by the Japanese Trade Union Confederation (Rengo), wage negotiations between labor and management last year yielded an average 2.07 percent pay increase — the sharpest in 15 years — as many of the large firms increased basic pay scales for employees.