Japan looking to introduce reforms to pay rises

Employers urged to 'respond positively' to wage increase requests

Japan looking to introduce reforms to pay rises

Japanese Prime Minister Fumio Kishida raised anew the topic of sustainable pay this week amid high inflation.

Addressing Parliament, the leader said he would introduce reforms to create an environment that will support sustainable pay rises.

"Regardless of age and gender, we will set up a system to provide support straight through from reskilling to changing jobs. We'll look at retraining from a longer-term perspective," Kishida said as quoted by Bloomberg.

He made the remarks as Japan's inflation rate hit a 41-year high of four per cent in December 2022, Bloomberg reported, citing data from the Internal Affairs Ministry.

According to the prime minister in his address, he will not hesitate to take necessary steps to tackle inflation in Japan, Bloomberg reported.

He also reiterated that wage expansion should be higher than the current inflation, a remark he previously made in front of business groups early this month.

"The future of the (Japanese) economy will be totally different depending on how pay hikes will be implemented this year," Kishida previously said.

In Japan, the 2023 projected salary increase is expected to reach 2.6%, according to a report from the Willis Towers Watson.

Wage hike as 'social responsibility'

Keidanren, an influential business group in Japan, is already calling on employers to "respond positively" to requests of pay hikes.

"We are urging our member companies to respond positively to wage increases as their social responsibility by maintaining and bolstering momentum for the move while paying close attention to price trends," said Masakazu Tokura, chairman of Keidanren, as quoted by The Asahi Shimbun.

The remarks came during the annual "shunto" labour negotiations, where Rengo (Japanese Trade Union Confederation) called for wage hikes of up to five per cent.

"Many people are struggling because of the coronavirus pandemic and soaring prices. Labor and management should work together to make this a turning point for the future of Japan," said Rengo president Yoshino Tomoko, as quoted by NHK-World Japan.

Clothing retailer Uniqlo recently announced a wage hike of up to 40% in March, citing inflation and improving investment in its personnel.

Silicon wafer maker Sumco is also planning to grant 6,000 employees up to six per cent of wage increments this year, while considering a 10% increase in the starting salary of workers who will join in April, the NHK-World Japan reported.

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