LABOR MANAGEMENT RELATIONS
Vol.34-No.04 April 1,1995
1995 Shunto Wage-Hike Requests Presented
In February the 1995 shunto, or annual wage negotiations, got underway in earnest. Expansion of domestic demand via higher consumption in necessary for steady economic recovery and thus, a monthly wage raise "averaging 14,000 yen" is desirable, said Rengo (Japanese Trade Union Confederation), the national center of labor unions. Nikkeiren (Japan Federation of Employers' Associations), the center for management strategy, meanwhile, noted "there is no room for wage hikes this year," setting forth a wage increase of zero percent. Thus indicating that labor and management are widely divided over this year's pay raise. Labor wants to base its wage increase averaging 14,000 yen on setting the nation's economy on a path of gradual recovery, while management is negative regarding labor's demand, maintaining that the wage hike should not allow for a margin stemming from general price increases. In the forthcoming shunto, Rengo will switch from its traditional stance of asking for percentage-based increases and toward one based on monetary amounts, with the major goal of narrowing the gap in amounts of wage hikes between large firms and smaller-scale ones. Specifically, both labor and management are seen settling for pay hikes of a little over the record low of 3.17 percent set last year. They find it difficult to gain higher wage increases than the year before despite emerging signs of recovery in the economy.
Labor unions of major metal industries which lead the country's shunto made the following wage-hike demands. Major unions under the umbrella of Tekkororen (Japan Federation of Steel Workers' Unions), such as Nippon Steel, decided to seek a 5,500 yen wage hike (including a 3,500, yen or 1.9 percent, annual automatic hike) for the standard worker aged 35 with 17 years of service, down 7,000, yen or 2.43 percentage points from last year's 12,500, yen or 4.33 percent demand. Mirroring the severe business environment comparable to that of the strongyen slump of 1987, the unions will strive to maintain real wages with a wage hike of 200 yen equibalent to a 0.6 percent increase rate of consumer prices for 1994. They will ask for summer and year-end bonuses totaling 1.38 million yen for 39-year-old employees with 21 years on the job, the same amount as last year's.
The unions of Kobe Steel Ltd., due to delay in shunto discussions, forwarded to management their demand for a pay increase two weeks later than the unified date of wage-hike requests set by Tekkororen. Kobe Steel, hard hit by the January 17 eqrthquake, suffered a total of around 74 billion yen worth of damage. Because of the direct effects of the tremor, the firm's unions had drawn attention from other unions as to how they will set their wage demands. They will follow in the footsteps of other key member unions which will unify wage requests and will negotiate summer and year-end bonuses alone in this year's shunto. They will postpone talks on wage hikes and shorter working hours until after the summer when their company sets up a reconstruction plan. Unions affiliated with 5 steelmakers, including Kobe Steel, had traditionally joined together under the Tekkororen umbrella for the shunto. The unions of Kobe Steel, however, will be an exception this year.
Unions of 8 major firms, such as Mitsubishi Heavy Industries, affilated with Zosenjuki submitted to management their wage hike demands averaging 12,000 yen (including 5,000, yen or 4 percent, annual automatic hike), down 2,000, yen or 0.79 percentage points from the previous year, and summer and yearend bonuses totaling 750,000 yen plus 3.5 months' pay-which are the pillars of their wage requests. Labor unions of the shipbuilding industry are positive about a wage raise because of relatively favorable business conditions, while management stress uncertain prospects for the industry as the ongoing rise of the yen has resulted in a fall in ship prices. Labor unions at Kawasaki Heavy Industries, hard hit by the Hanshin disaster, focused their spring wage-increase negotiations only on such unified requests as a wage increase and postponed setting its demand for reduction of working hours.
Denkirengo (Japanese Electrical Electronic and Information Union) decided to request a 13,500 yen boost for the 35-year-old standard worker with 17 years of service (including the annual automatic raise), down 1,000 yen from last year. This was the organization's first wage-increase request for individual workers. Semiconductor manufacturers are doing well in the electrical machinery industry. Management, however, is expected to respond that weakening international competitiveness resulting from the yen's steep rise will cause a financial burden on them. Thus, labor and management are likely to face tough wage negotiations.
Eleven major labor unions of Jidoshasoren (Confederation of Japan Automobile Workers' Unions), which include the unions of Toyota Motor Corp., and Nissan Motor Co., demanded a monthly 12,000, yen or 3.9 percent, wage increase (including an annual pay raise as measured by Toyota's standard wages). Concerning bonuses, Toyota's workers union asked for bonuses totaling 5.8 months' pay. Nissan's and Honda's, on the other hand, sought 5 months' pay and 5.6 months' pay, respectively, almost the same level as last year's.
The unions of private railways, power companies and Nippon Telegraph and Telephone Corp. decided to abandon their usual strike tactics during this year's wage talks with management, stating that priority should be placed on restoration and reconstruction work because of the effects of the quake. They act as pace-setters for wage negotiations together with labor in metal industries. Leaders of Rengo expressed the view that "there is no impact of the trembler on the overall wage struggle," but they will inevitably have to tone down their demands for this year's wage struggle. The Hanshin quake will thus likely cast a long shadow over wage negotiations as a whole.
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