TOKYO : Every March, management of major Japanese firms meet with unions for wage talks across industries that set the tone for employees' pay in the new fiscal year.The precedent set at the 'shunto' spring wage talks also influences wages at smaller firms that employ seven out of 10 Japanese workers.
TOKYO : Every March, management of major Japanese firms meet with unions for wage talks across industries that set the tone for employees' pay in the new fiscal year.
In Japan, with the economy entrenched in deflation for 15 years since the recession of the 1990s, people are unable to shake the perception that neither prices nor wages will rise.HOW IS PAY DECIDED IN JAPAN? The shunto wages eventually peaked in 1974 with a record 33 per cent rise in pay. The increases fell below 3 per cent after Japan slipped into deflation and prolonged economic stagnation in the late 1990s as it suffered its own banking crisis.
Incumbent premier Fumio Kishida wants to change this under his flagship"new capitalism" policies that seek to distribute wealth more broadly among the population through higher pay. Analysts expect big firms to offer wage hikes of around 3 per cent in wage talks, which would be the fastest pace of increase since 1997 when Japan was on the cusp of deflation. That would follow last year's 2.2 per cent increase, the first hike in four years.
As Japan slid into deflation in the late 1990s, management and unions agreed for more than a decade to no increases in base pay.
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