Friday, September 20, 2013
DJ: Japan Kicks Off 3-Way Wage Talks With Business, Labor Lobbies
TOKYO--The Japanese government on Friday kicked off a series of meetings with major business lobbies and labor unions aimed at forming a shared awareness of the drive to end deflation in the hope that the talks will convince companies to raise the nation's long-stagnant wages.
"Our mission with these talks is to build a mutual understanding among the three parties on how companies, facing severe global competition, can still increase their profits and pass on the benefits to workers in the form of employment and wages," economy minister Akira Amari said after the inaugural meeting.
The rare three-way talks are being hosted by Prime Minister Shinzo Abe, who believes higher wages are indispensable in the fight against 15 years of deflation.
"The economy is making progress, and the key is whether we can turn that momentum into a virtuous cycle where profits, wages and employment all improve," Mr. Abe said during the meeting held Friday afternoon.
Japan plans to increase the 5% sales tax rate to 8% in April next year, and without higher wages, analysts say the tax increase will dent consumer sentiment, rendering almost impossible the goal of pulling the economy out of deflation in the near future.
Participating in the debate are major figures from business lobbies and labor unions, including Japan Business Federation chief Hiromasa Yonekura, and Nobuaki Koga, chairman of the Japanese Trade Union Confederation.
As wage and employment issues have traditionally been a sensitive negotiation matter between labor and management in Japan, the two parties are concerned about the government entering the fray.
A government official said the talks will only deal with broad views on how the three can cooperate in improving macroeconomic conditions. He added that Mr. Amari promised the labor and business leaders that the panel won't dig into specific, individual cases.
The panel will convene several times this year, aiming to wrap up by January at the latest. Officials say they hope the outcome of the meeting will have some influence over annual pay negotiations next spring.
In recent years, most companies have complied with demands from workers to boost bonus payments. But economists say it is important that companies hike monthly salaries rather than the one-off payments.
Still, companies are reluctant to increase base salaries because such increments are long-run costs that are difficult to cut back at a later stage.