Japan’s largest labor organization Rengo is set to demand wage hikes totaling 5% or more, its president, Tomoko Yoshino, said Thursday.
“It’s important for wages to sustain growth. With that in mind, we’ve decided to aim for more than 5%,” Yoshino told reporters, adding it was the bottom line to drive a wave of wage hikes.
“It’s true, uncertainty is high,” she said, citing developments such as the conflict in the Middle East and the plight of many small firms which are struggling to make ends meet.
Rengo will finalize its stance in December ahead of next year’s wage negotiations.
Policymakers have said wage hikes are a major issue in Japan as the world’s third largest economy strives to put an end to deflation and sustain inflation at 2% in a stable manner.
Japanese wages were stagnant for decades until last year, when rising raw material costs pushed up inflation and piled pressure on firms to compensate employees with higher pay.
Major companies agreed to average pay hikes of 3.58% this year, the highest increase in three decades.
On Thursday, Rengo kicked off debates on pay rises for the coming year and set its expected wage demand by year end, before it negotiates with management early next year so that major firms can offer pay rises around the middle of March.
“It does not mean that the wage hike will be over in 2024. What’s important is to continue to raise wages steadily and sustainably,” Yoshino added.
