Japanese pay hikes must exceed last year's, Rengo union head says (updated)

Mitsui Fudosan Co

24/01/2025 04:57

* 
      Rengo to focus on beating last year's wage hike
    

        * 
      Yoshino: few people feel real living conditions have
improved
    

        * 
      Targets pay rises of at least 6% for smaller firms
    

  
 (Adds details from interview and context)
    By Anton Bridge and Tetsushi Kajimoto
       TOKYO, Jan 24 (Reuters) - Japanese annual pay increases
this year must exceed the 5.1% secured last year because real
wages continue to fall, the head of the Rengo trade union group
said on Friday.
    President Tomoko Yoshino said the impact of rising prices
meant the group was focused on securing a result that
outstripped last year's, which was the biggest increase in 33
years.
    "Even after last year's wage hikes I think there are few
people who feel their real living conditions have improved,"
Yoshino said in an interview.
    The outcome of the "shunto" labour negotiations is a
barometer for spending and durable inflation in Japan, and a key
factor that influences the central bank's monetary policy
decisions.
        Rengo is formally seeking wage increases of 5% or more
in this year's wage negotiations. 
        Real wages, which take into account the impact of
inflation, fell in November for the fourth straight month, data
showed this month, highlighting how rising prices, especially
food costs, have hit the wallets of everyday Japanese.  
    Yoshino spoke to Reuters hours before the Bank of Japan
raised its short-term interest rate target to 0.5% on Friday.
She declined to comment on the central bank's policy ahead of
the outcome. 
        The BOJ has set sustained, broad-based wage hikes as a
precondition for raising borrowing costs and on Friday it said
many firms had indicated they would offer solid pay hikes at the
"shunto" negotiations this year.
    Smaller firms, however, have typically struggled to pass on
rising costs, including personnel costs, to customers, Yoshino
said, adding that this year's negotiations will centre on how
SMEs can find the resources to fund the desired increases.
    Rengo has targeted hikes of at least 6% for smaller firms,
compared with the 4%-5% they achieved last year, to narrow the
income gap with workers at bigger companies.
    Larger firms such as Uniqlo parent Fast Retailing  9983.T 
said it would increase wages for full-time headquarters and
sales employees by up to 11% from March, while Nippon Life
Insurance  NPNLI.UL  and Mitsui Fudosan  8801.T  have said they
are planning hikes above 5%.
        The government has repeatedly pushed companies to
aggressively increase pay. Years of deflation during Japan's
"lost decades" of economic downturn have meant that many
Japanese workers have now fallen behind those in other countries
when it comes to pay and purchasing power.
    "Talented young people are going abroad," Yoshino said.
"Japan has the lowest wages among developed countries so if
wages don't rise we'll be left behind."
    

 (Reporting by Anton Bridge and Tetsushi Kajimoto; Editing by
David Dolan and Jacqueline Wong)
 ((Anton.Bridge@thomsonreuters.com;))