Wage hikes by major car and electronics makers that have wrapped up this year's negotiations with their labor unions were generally higher than a year ago — an outcome that is hoped to bode well for ongoing talks in other industries and at small and medium-size firms. Given that big listed companies are expecting to earn record profits, however, the raises do not appear robust enough to stimulate consumer spending — whose recovery remains sluggish and weak even as Japan's economy is on an extended growth track. Companies should share more of their earnings with employees as a strategic investment in manpower that supports their future business.
According to a tally by the Japanese Trade Union Confederation (Rengo), wage hikes — increases in the workers' base pay scale and seniority-based automatic raises combined — offered to 675 unions that have concluded their talks with management came to an average of 2.16 percent, slightly higher than the level at this stage in the wage negotiations last year. Some companies reportedly offered a 3 percent hike in their employees' total annual income, including bonuses and other allowances — matching the request made to big business leaders by the administration of Prime Minister Shinzo Abe ahead of the shuntō wage talks season.
The nation's October-December gross domestic product expanded an annualized 1.6 percent from the preceding three months, marking the eighth consecutive quarterly increase, the longest growth streak since the bubble boom of the late 1980s. For two years in a row, listed major companies are forecast to earn record profits, with their cash reserves continuing to expand. The big firms are apparently in better condition to offer higher raises to their workers.