Japan’s biggest union reaches early deal for wage hike By Reuters

© Reuters. FILE PHOTO: Office workers wearing protective face masks, following the coronavirus disease (COVID-19) outbreak, work at a commercial building in Tokyo, Japan November 27, 2020. REUTERS/Kim Kyung Hoon

TOKYO (Reuters) – Workers at Japan’s biggest union have reached early deals for big pay rises with employers as cost of living pressures mount and companies scramble to find staff in a context of labor shortages, trade unionists said on Thursday.

In an unprecedented move, 18 unions under the aegis of UA Zensen, which represents workers in the service, textile and distribution sectors, have announced the first results of closely watched annual wage negotiations known as the “shunto”.

The agreements come nearly a week ahead of the March 15 announcements of shunto results from Japan’s largest employers, which historically set a precedent for wage growth for the coming fiscal year from April.

The 18 unions have fully agreed with their employers for average wage increases of 5.28%, unionists said at a press conference.

Prime Minister Fumio Kishida is pressuring businesses to raise wages by 3% or more to tackle the rising cost of living. The Bank of Japan is also desperate to see wage increases strong enough to achieve sustainable demand-driven inflation.

To achieve wage hikes, Kishida’s government is to hold a joint meeting with unions and management on March 15 when the main results of the shunto are expected.

In addition to these unions under UA Zensen, some other groups, including automaker unions, also announced that workers’ demands for higher wages had been met by the March 15 deadline.

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