By Makiko Yamazaki and Kentaro Sugiyama
TOKYO (Reuters) -Japan’s largest labour union group is seeking the biggest salary hike for its workers in over 30 years as both the government and central bank look for signs of sustainable wage growth to drive the economy.
Rengo, which has about 7 million members, said on Thursday its member unions are seeking an average wage hike of 6.09% for this year, the first time in 32 years that its request has topped 6%.
Its demand could mean another year of sizeable wage increases in Japan’s annual labour-management talks, which Prime Minister Shigeru Ishiba sees as key to Japan’s economic progress.
Last year, Japanese companies agreed to an average 5.1% wage hike following a 3.5% rise in 2023.
A broad-based pay rise is also a prerequisite for the Bank of Japan to continue monetary policy normalisation after the central bank raised interest rates to the highest level since 2008 in January.
Rengo’s demand includes an average 4.51% increase in the base pay, a key gauge excluding the seniority-based automatic annual increase already built into the pay scale.
It surpasses its wage growth target of least 5% in 2025, including a rise in the base pay of at least 3%.
Rengo’s member unions had sought an average 5.85% increase around this time last year.
The group this year is focused on achieving solid wage hikes at smaller firms to narrow the income gap with workers at large firms.
The average wage hike sought by unions with less than 300 members stands at 6.57%, the largest increase since 1994.
Smaller firms are already spending far more of their profits on wages than their bigger counterparts and could struggle to keep hiking pay.
Talks between management and labour unions over the 2025 wage levels typically conclude around mid-March at major firms, and go into effect a few months later.
(Reporting by Makiko Yamazaki and Kentaro SugiyamaEditing by Chang-Ran Kim and Christina Fincher)
