Home Stock Market Japan’s biggest labor union aims for over 5% wage increase in the coming year.

Japan’s biggest labor union aims for over 5% wage increase in the coming year.

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Japan’s biggest labor union aims for over 5% wage increase in the coming year.

Japan’s Largest Labor Union to Seek Wage Hike in 2023

Rengo Plans to Negotiate Over 5% Pay Increase

Japan’s largest labor organization, Rengo, is gearing up to request a total pay hike of more than 5% during negotiations in the spring of next year. According to sources cited by public broadcaster NHK, Rengo aims for a 3% increase in base salaries, aiming to address long-standing stagnation in Japanese wages. This move comes as inflation and rising living costs put pressure on companies to provide higher compensation for their employees.

Positive Trend in Japanese Wages

Last year, Japanese wages saw a positive shift after decades of stagnation. Rising raw material costs led to increased inflation, driving major companies to agree on average pay hikes of 3.58% – the highest increase in three decades. This upward trend in wages has provided some relief to households facing the challenges of rising living costs.

Rengo’s Strategy for the Future

Rengo plans to initiate discussions on pay raises this month for the upcoming year. The organization aims to finalize its expected wage demand by the end of the year, enabling negotiations with management in early 2023. By doing so, major firms will have the opportunity to offer pay raises around mid-March.

Addressing Economic Challenges and Encouraging Growth

Prime Minister Fumio Kishida has emphasized the importance of sustained wage increases to alleviate the impact of rising living costs on households and to stimulate economic growth. Similarly, Bank of Japan Governor Kazuo Ueda has emphasized the need to maintain loose monetary policy until wages increase sufficiently to sustain a 2% price growth rate.

In conclusion, Rengo’s plan to seek a wage hike of over 5% demonstrates its commitment to improving the financial well-being of workers in Japan. As the country aims to break free from deflation and ensure economic stability, increasing wages is a crucial step towards achieving these goals.