Employers began to announce on 2016 salary policies during the shunto, or Spring Labor Offensive season. The Japan Council of Metal Workers’ Unions (JCM) had replies on March 16, which was the first of all industries. The labor expected substantial base-pay scale hikes and increased total annual income. Japanese businesses retain as much as 354 trillion Yen in the internal reserves, but employers presented a low-scale hike in the basic wages. The labor demanded timidly, and, accordingly, employers have adapted to that.


BREAK UP PRODUCTIVITY STANDARD PRINCIPLE!


Last October a bilateral panel was created between the government and the business, replacing with the trilateral body of the government, labor unions and employers. Prime Minister Abe Shinzo urged business leaders to actively invest in human resource development in order to accomplish a goal of 600 trillion Yen of GDP in nominal terms and achieve good economic cycle through labor policies to increase more both basic wages and total annual salary than the results of 2015.


The business side, however, which followed policies of Prime Minister Abe, has changed attitudes to refuse a hike in the basic wages lately; they say ‘an increase should be on the total annual basis, including bonuses and allowances’ because of low stock prices, high-Yen appreciation and cheap oil prevailing since the year-end of 2015.


One more success sought by Premier Abe


Prime Minister Abe requested again in the dialogue with business leaders held on March 4 to make one more success through a wage increase policy with an intention to lead social atmosphere to amending the Constitution, which is his long-cherished ambition. But Chairman of the Keidanren, or the Japan Business Federation, Sakakibara Sadayuki rejected the Premier’s appeal. He told that companies with higher earnings would surge salary on the total annual sum basis.


Big labor unions, including the JCM, began negotiation with the management behind the closed door early March, so the official announcements are simply a ceremony. The labor had demanded employers to set right wages and increase total sum of salary based on the real living conditions. The employers’ side, however, uses exclusively the productivity standard principle in responding to the labor: wages should be set to meet business performance.


As is symbolized as in Toyota, major labor unions followed the productivity standard principle: they relied on ‘negotiation talks’, focusing on bonuses and accepted the employers’ decisions of a hike on the total annual basis. The management of Toyota announced recently an estimate of 2.27 trillion Yen of net profit (by 4% increase) in the current fiscal term, but rejected the labor’s demand to increase the basic wages. President Toyota Akio told; ‘business circumstances have changed due to anticipated exchange rate development and intensification of regulations on environment by emerging economies’.


A tax reduction benefit of R&D expenditure incurred by Toyota exceeds 10 billion Yen. Big businesses like automobile industry and electrical industry gain huge profits thanks to the state’s support. When big companies show the credential of ‘an uncertain prospect for management’, the labor’s a demand to increase the basic wages disappears swiftly. Employers enjoy ‘the best spring season’ ? a natural consequence.


Government-led Labor Offensive Stumbles


The government-led 2016 Labor Offensive has stumbled. One more success has lost on the government side. Prime Minister Abe and Chief Cabinet Secretary Suga Yoshihide evaded comments on the employers’ announcements. Only one, Minister of State for Economic and Fiscal Policy Ishihara Nobuteru, said that wage hike demands continued, though he is not an expert on labor affairs. The remark is irrelevant.


The Rengo, Japan Trade Union Confederation, announced results on March 18 after collecting data from the affiliated unions. According to that, the average increase rate of first-round compilation is 2.8% (minus 0.35%, compared with that of 2015), which just exceeds 2%. The result obtained by JMC, which was the first of all unions, will not affect a lot on the wages of workers of medium and small-sized companies. Though the political and business circles as well as the Rengo praise the outcome, the 2015 Offensive ended in 2.20% (1.88% for medium and small-sized companies) and the real wages had dropped by 0.9% in December, 2015.


Trade unions deteriorate if labor offensive fails year after year. The labor cannot fight against the management, if it clings to a demand to increase basic wages and does not encourage all workers to get united to struggle.


April 5, 2016