Japan Inc. Unions Planning to Dial Back Wage Demands by Half

  • Group to seek 3,000 yen or more base pay raise, from 6,000 yen
  • Union group's members include Toyota, Hitachi, Panasonic

A Japan labor group whose members include Toyota Motor Corp., Hitachi Ltd. and Panasonic Corp.’s unions said they will seek half the minimum wage increase in 2016 compared with its plans entering this fiscal year.

The Japan Council of Metalworkers’ Unions said its members intend to request raises of 3,000 yen ($24) or more in monthly base pay, according to a policy plan posted on its website. Last year, the group said its 53 company unions would demand gains of at least 6,000 yen.

The dialing back of pay ambitions by Japan’s labor unions risks setting back government efforts to reflate the economy after the nation entered its second recession since Prime Minister Shinzo Abe took office in 2012. Bank of Japan Governor Haruhiko Kuroda and Abe’s government have emphasized the need for higher salaries to play a role in spurring a revival from the seventh recession in about 20 years.

“We are still half-way to seeing a recovery in consumer spending, exiting from deflation and creating a ‘virtuous cycle’ in the economy,” the union council said in its policy plan. The group’s member unions represent more than 2 million workers at companies in the automotive, technology, and electric wire industries.

Base pay for regular workers, excluding bonuses and overtime, rose by less than 1 percent in each of the first nine months of this year, according to Japan’s labor ministry.

The union representing workers at Toyota, Japan’s largest company, may seek a 3,000 yen base-pay raise next year, the Nikkei newspaper reported Thursday, without attribution.

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