After decades of being crisis-free in terms of relations with its labor unions, Japanese firms may just be at the brink of a showdown as annual wage negotiations get under way. Unionists seem resolute in pushing for wage increases, especially after many Japanese firms declared profits from their year-end financial reports, ending what was a long period of passivity from the unions. Records show that the years of quiescent attitude from Japanese workers has seen very few pay increases, and the country’s unions are keen to change the status quo this time.
Toyota Motor Corp., the world’s leading car manufacturer, is a prime example – with the Japanese car giant posting huge profits that may be indicative of the whole Japanese auto industry. Car manufacturers and exporters have been given a boost by the weaker yen, a byproduct of Japanese Prime Minister Shinzo Abe’s aggressive fiscal policies that began when he swept to power in late 2012. But the key turning point of Abe’s economic growth blitz, dubbed Abenomics – aside from fattening Japan Inc.’s bottom line – calls for Japanese firms pass on the to the workers, as consumer spending would then give confidence back to the Japanese market and serve as a deeper foundation for economic growth. As such, Abe has been calling for wage increases, especially among the blue-collar workers.
Going on strike to push for these wage increases would be at the very least out of character for the six-million strong Japanese Trade Union Confederation. It has been decades since workers and employees remember going on strike. This is a result of a generally prosperous population, where almost everyone is considered middle class. And with a low crime and unemployment rate, generous welfare benefits, relatively high wages and much narrower income inequality than many other developed nations, Japan has rarely been a place where employees go to strike regularly – much unlike South Korea in this case. But the current wage negotiations may be different, especially with a sales tax increase looming. A recent survey revealed that only around 17 percent of firms in Japan plan to increase wages this year, which may become the spark for labor confrontations in the country.