Results of the 2003 spring joint labor negotiations and corporate moves pertaining to periodic pay raises

According to the status of major private companies' wage hike demands and settlement results of 2003 spring joint labor negotiations, released at the end of August by the Ministry of Health, Labour and Welfare, the wage hike rate for this year's spring labor negotiations was 1.63%. This was 0.03 percentage points lower than last year's record-low level, and was the lowest rate ever since data compilation began in 1965.

It does not come as a surprise, therefore, the hike that had been settled amounted to 5,233 yen, which was 32 yen less than the previous year. The data was compiled by 189 companies listed on Section 1 of either the Tokyo or the Osaka Stock Exchange, with paid-in capital of two billion yen or more, with 1,000 or more employees, and with labor unions.

According to a compilation of wage hike data released in August by Rengo, targeting 639 unions, the hike rate was 1.63%, and the hike amount was 5,063 yen, which was down 0.09 percentage points and 284 yen from the same period of the previous year.

Meanwhile, a top management survey on the 2003 spring joint labor-management negotiations, which Nippon Keidanren had announced in August, showed that one out of two companies, or 50.1%, incredibly, did not increase their employees' basic monthly pay, but raised only their regular pay.

This survey targeted 2,130 Nippon Keidanren and Tokyo Employers' Association member companies, and received responses from 503.

When asked how they felt wages should ideally be determined from now on, a majority of the respondents (60.6%) said that the periodic pay raise system should be abolished and the switch made to a system of determining wages according to achievement or performance that may even include demotions. It also became clear that a staggering 90% or more of the surveyed companies were considering either abolishing or reexamining their traditional system of periodic pay raise + raise in basic monthly pay, if the following people were added: the 25.5% who felt that the company should have periodic pay raises only and have employee achievements and performance reflected in their personal bonuses, and the 6.7% who felt that the wage system should center around periodic pay raises and that basic monthly pay should be increased if necessary.

These figures suggest that the reexamination of the wage system, which had come to the forefront during this year's spring joint labor negotiations, is bound to proceed much more rapidly than initially anticipated.

It is often said that the Japanese people tend to follow the leader and be "like everybody else." It appears that this dynamics is also at work in this case.

1US$=\117 (September 2003)