Feb 7, 2023
Japan PM to Ratchet Up Wage Hike Push With Business, Labor Talks
(Bloomberg) -- Japanese Prime Minister Fumio Kishida is set to increase pressure for pay increases by reviving three-way talks among the government, business leaders and labor unions that have been dormant for almost eight years.
A leader of an opposition party, Yuichiro Tamaki, raised the idea with Kishida at a Tuesday meeting and received a favorable response, he said on Twitter. Tomoko Yoshino, the leader of Japan’s labor union federation Rengo also pressed for such talks in a meeting with Kishida on Monday.
“To create momentum for pay rises not only among large corporations but among small and medium-sized firms with no labor unions, I proposed that talks among the government, business and labor should be held soon,” Tamaki said. “The prime minister clearly responded that he would work to do that.”
As inflation surges to its highest levels in four decades, Kishida has repeatedly urged business leaders to raise pay faster than prices. The blow to household finances from rising food and fuel bills has contributed to the support rate for the premier falling to some of its lowest levels since he took office in October 2021.
Plans for the talks come as data showed that Japan’s wages rose at their fastest pace since 1997 in December, potentially fueling speculation that the Bank of Japan would consider shifting policy after Governor Haruhiko Kuroda steps down in April.
The unexpectedly large gain for the month was boosted by winter bonuses, and the key factor in the coming weeks will be the results of negotiations between firms and labor unions on pay for the financial year starting in April.
Major companies including Fast Retailing Co., Asia’s largest retailer, and games giant Nintendo Co have blazed a trail by pledging wage hikes, but smaller firms are likely to find it more difficult to follow their lead.
The three-way talks among government, business and labor were last held in April 2015 under former Prime Minister Shinzo Abe. The talks have previously produced statements prodding firms to make sure they are paying small subcontractors fairly as costs rise.
--With assistance from Takashi Hirokawa.
©2023 Bloomberg L.P.
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