Japan's largest union group clinches pay deal exceeding inflation ahead of 'shunto' day (updated)
09/03/2023 11:01
*
Big firms set to offer biggest pay in quarter century
*
Uncertainty remains on whether wage growth sustainable
*
'Shunto' wage round set to wrap up on March 15
(Adds detail, background)
By Tetsushi Kajimoto
TOKYO, March 9 (Reuters) - Workers from Japan's largest
group of trade unions have struck early agreements for hefty
wage hikes with employers as cost of living pressures grow and
businesses scramble to secure staff amid a labour crunch, union
leaders said on Thursday.
Eighteen unions grouped under the umbrella of UA Zensen,
representing 240,000 workers in the service, textiles and
distribution sectors, announced early pay settlements in the
closely-watched annual wage talks known as "shunto".
The 18 unions have agreed in full with their employers for
average wage hikes of 5.28%, union officials told a news
conference.
Though less than the 6% demanded by UA Zensen, the wage rise
exceeds consumer inflation, which is running at a 41-year high
of 4.2%, and was well above the 2.85% expected by economists
polled by the Japan Economic Research Center (JERC), a private
sector think-tank.
Prime Minister Fumio Kishida is pressuring companies to
raise wages by 3% or more to beat rising living costs. The Bank
of Japan also wants to see wage hikes strong enough to achieve
sustainable demand-driven inflation.
The wage agreements with UA Zensen come almost a week before
the March 15 announcements of shunto wage settlements from
Japan's largest employers. Kishida's government has scheduled a
joint meeting with unions and management for that day.
It was the first time that UA Zensen had reached an early
pay settlement with employers.
Some other labour groups, including automaker unions, have
already announced that their demands for higher pay have been
met.
Toyota, the world's No. 1 automaker, announced it would
accept a union demand for the biggest base pay hike in 20 years,
though it did not give details.
Honda had agreed to union demands for a 5% pay rise, with
the average monthly base salary gain of 12,500 yen, the biggest
jump in more than 30 years.
Masaru Furukawa, general secretary of UA Zensen, hailed the
early pay deal as "a big message towards the social issue of
wage hikes."
But he went on to warn that "as price hikes continue, we
must achieve a virtuous cycle of wage growth and prices to
defeat deflation and protect unionists' livelihood."
The deal enabled supermarket chains like Aeon, Daiei and
MaxValu to announce early pay settlements.
It remains to be seen whether the wave of wage hikes at big
firms spreads through to small firms who often struggle to pass
on rising costs to their bigger clients.
Wage growth has been stagnant since the 1990s, and resulted
in the world's No. 3 economy sliding into nearly two decades of
grinding deflation.
There was barely any hike in base pay in the decade before
Japan's late prime minister Shinzo Abe came to power, pledging
to reflate the economy and prevent a return to deflation.
(Reporting by Tetsushi Kajimoto; Editing by Sam Holmes and
Simon Cameron-Moore)
((tetsushi.kajimoto@thomsonreuters.com;))