Japan’s spring wage talks begin with labor-management forum

A labor-management forum meeting hosted by the Japan Business Federation, or Keidanren, was held in Tokyo on Friday to effectively kick off this year’s shuntō spring wage negotiations, with the focus on whether the previous year’s strong pay hike momentum seen among large firms will spread to smaller businesses.

The 2024 talks resulted in salaries rising by over 5% on a whole, but hikes at small and midsized companies, which account for some 70% of the country’s employment, were far lower than the average.

The Japanese Trade Union Confederation, or Rengo, the umbrella organization for labor unions, is seeking an overall wage hike of at least 5%, including pay-scale increases, and a hike of 6% or more at small and midsize firms.

But Keidanren, which comprises the country’s major companies, calls the target for smaller firms “extremely high,” although it acknowledges the need to raising wages of workers there amid prolonged inflation.

In his opening remarks at the forum with Rengo, Keidanren Chairman Masakazu Tokura stressed that Japan is “entering a critical phase for realizing a ‘virtuous cycle of growth and distribution.'” He also called for “efforts across supply chains” to enable smaller businesses to pass rising costs on to consumers to generate funds for pay hikes.