Japan’s unions find surprising allies in push for higher pay, work with government, companies

By Thomson Reuters Mar 13, 2024 | 4:59 AM

By Tetsushi Kajimoto

TOKYO (Reuters) – When Japanese Prime Minister Fumio Kishida hand-picked a unionist-turned-opposition lawmaker Wakako Yata as one of his special advisers last year, it surprised labour leaders long known for their ties with the opposition.

However, the appointment of Yata — a former Panasonic unionist — to the post in charge of labour and wages, underscored growing cooperation, rather than confrontation, between the government and unions as policymakers try to definitively wrest the world’s fourth-largest economy out of years of crippling deflation and anaemic growth.

Kishida has made putting an end to years of meagre wage growth a top priority to jumpstart feeble consumer spending, and cooperation between unions, the government and employers has been notable behind wage hikes in recent years.

Toyota Motor agreed to give factory workers their biggest pay increase in 25 years on Wednesday and other large companies have agreed to fully meet union demands, though smaller firms are under far greater cost pressure.

Representatives of government, labour and management held a few joint meetings in the past year, including one on Wednesday, to push wage hikes across the country. The tripartite meeting also discussed how to make it easier for smaller companies to pass on costs to bigger clients.

“It’s just a matter of being fair and just, and it worked,” said one unionist, who declined to be identifed due to sensitivity of the issue, referring to labour-government cooperation.

“We are all in the same boat, looking at the same direction,” another unionist said on condition of anonymity.

The framework among government, labour and employers opened the door for a new style of Japanese labour unions, whose numbers have dwindled to below 20.

In Japan, it’s rare to see labour go on strike, for example.

Since a property bubble burst in the early 1990s, Japanese firms focused on the three excesses of labour, debt and production capacity, followed by about a decade of freezing base pay hikes until the ruling Democratic Party swept to power in late 2012.

All the while, Japanese firms prioritised job security and the status quo rather than fighting for higher wages.

Yata said in an interview with Reuters on Wednesday that wage hikes at big firms this year would likely exceed those of last year, paving the way for defeating deflation.

(Reporting by Tetsushi Kajimoto; Additional reporting by Kentaro Sugiyama; Editing by Christopher Cushing and Kim Coghill)