Various Results in Spring Labor Negotiations

Following governmental demand for wage hike, major companies in Japan offered high growth of salary to their employees on the day of showdown. However, the trend of active increase seems to be slightly slowed down, as some employers failed to meet the demand of labor union. Having long suffered from steep price inflation, the households cannot have comfortable perspective for their future.

Japanese Trade Union Confederation (Rengo) set the goal of wage hike in 2025 spring labor negotiations (shunto) at 5 percent or more. The average of requests from labor unions in this spring was 6.09 percent, higher than that of last year at 5.85 percent. Shiegru Ishiba administration encourages higher wage hike than increase of price of goods and services. It has closely watched whether the employers can meet those robust requests. Decisions of major companies were concentratedly delivered on March 12th.

 

Toyota Motor Co. fully accepted the request of its labor union for consecutive five years. The employer agreed with its workers on 24,450 yen of increase for monthly salary. Annual bonus would be rising equivalent to the salary for 7.6 months. Mitsubishi Chemical offered 18,415 yen (4.8 percent) of increase in basic salary, which was beyond the workers’ request of 4 percent rise.

 

However, ambitious wage hike is not the overwhelming trend. Some companies showed difference in the results of labor negotiation. Honda Motor Co. held its wage hike at 8.5 thousand yen, lower than the workers’ request of 13 thousand yen. Nissan and Mitsubishi Motors also did not meet the demand of their labor unions. Car manufacturers are facing unforeseeable future as the president of the United States upholds additional tariffs on foreign cars.

 

Japanese Electrical Electronic & Information Union embraced a common goal of wage hike for each electric company, which was set at 17,000 yen of increase in basic salary. While Hitachi and NEC offered full amount to the demands, Mitsubishi Electric answered with 15,000yen of rise, Toshiba with 14,000 yen, Panasonic with 13,000 yen and Sharp with 12,000 yen. The results varied along with the policy of each company.

 

It is likely that both employers and workers recognize unusual tendency of price inflation these years. Consumers priceexcluding fresh foods in January 2025 was 3.2 percent higher than the same month in 2024. When it included, it went beyond 4 percent, marking the highest in these two years. Real wage, which counts on influence of price inflation, is still at the negative level. Political target of “wage hike higher than price hike” has yet been achieved.

 

Cost must be added on the price of goods to establish a preferable environment for each business, and to raise workers’ wage. Although companies can add cost on the goods purchased by companies, they are hesitating to do that for consumers. Most businesses that deal with consumers are small and mid-size entrepreneurs (SMEs), which occupy the most share of Japanese companies. It depends on the SMEs for Japanese economy to regain power with higher wage.

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