Issues in the 2007 Spring Joint Wage Negotiations
On January 15, Nippon Keidanren (the Japan Business Federation) and Rengo (the Japanese Trade Union Confederation) held an informal top-level meeting at which they expressed their views about the spring joint wage negotiations. Since their approaches to the negotiations have already been clarified, there were no particularly new issues; however, the meeting highlighted conflicting points which have emerged partly because of the economic recovery underway which will shape the actual opening of the 2007 spring struggle.
The key issues for this year's struggle seem to be the widening income gap and the labor distribution rate.
Rengo says that, while dividends paid to shareholders are 2.8 times as much as in fiscal year 2001, and compensation to directors has doubled, the annual disposal income for the household of worker decreased for eight consecutive years and the labor distribution rate* fell sharply from some 66 percent in fiscal year 1997 to some 60 percent in fiscal year 2005. The labor union also asserts that unstable employment, together with an increase in the number of low wage non-regular employees, has been generating anxiety among workers, widening income gaps, and subsequently causing stagnation of consumer spending, which is the foundation of continued economic expansion.
On the other hand, management counters by saying that the amount of compensation for directors is simply back to normal after the temporary reductions that followed the bursting of the bubble economy, and that the labor distribution rate itself is not a suitable theme to be discussed at a negotiasion, since the rate fluctuates substantially depending on changes in corporate performance, which is used as the denominator for calculation of the rate. The Japan Business Foundation also states that Japanese firms should strengthen their international competitiveness via continued investment, and that it is quite impossible to raise wages uniformly under such circumstances.
Both parties, moreover, have conspicuously differing opinions over the adoption of the white collar exemption rules. (As reported above, the government has given up the idea of submitting the related bills to the Diet.)
One wonders whether the labor distribution rate will be restored and whether the widening gap in society will come to a halt. Attention will be focused on the 2007 spring joint wage negotiations, which have just started.
* The proportion of the total value added created by a firm in a year and distributed to workers in the form of wages and the like.
