2007 Spring Joint Labor Negotiations: Most Leading Firms Respond, While New Tasks Crop up for Unions
On March 14, major automaker, electric and electronics and other companies responded to the demands of major labor unions in the automobile, electric and electronics industry affiliated with Kinzoku Rokyo (the Japan Council of International Metalworkers' Federation, or IMF-JC). Most major electric and electronics companies agreed to raise basic monthly pay by 1,000 yen - twice as much as last year. Toyota Motor Corp. offered a 1,000 yen raise in basic monthly pay, the same as last year, though its union had asked for 1,500 yen. Nissan Motor Co., Ltd and Honda Motor Co., Ltd. also balked at full agreement with the demands of their unions. Although the unions of automobile, electric and electronics manufacturers achieved increases in basic pay for the second consecutive year, the companies maintained a cautious stance towards pay hikes, giving priority to securing global competitiveness and overriding the unions' insistence that, amid present continued economic growth, the falling labor distribution rate should return to normal, leading to the expansion of consumer spending and thus stable economic growth.
The tendency of firms to share profits made from outstanding business performance in the form of bonuses and other payments rather than basic pay increases has actually strengthened: Toyota agreed to pay a record 2.5 million yen in annual bonuses, and Honda to pay 6.6 months of monthly wages as annual bonuses; both of these have fully satisfied the demands of their unions. As for the electric and electronics sector, Mitsubishi Electric Corp. agreed to accept its union's demand, which included record lump-sum payments. Matsushita Electric Industrial Co., Ltd. Toshiba Corp. and other leading companies decided not to raise wages, but will instead increase child-care allowances and subsidies for training for their employees.
On the other hand, many leading companies in services such as the distribution and catering industry, were influenced by the recent labor shortage and agreed fully to their unions' demands: some accepted the demand to upgrade non-regular employee status to regular, while others promised to improve the general treatment of workers.
Recently, an increasing number of firms, including Canon Inc. have opted for a wage system which comprehensively attach importance to roles and job descriptions to determine monthly pay. This move will undoubtedly undermine the traditional union approach of demanding uniform wage increases for industries. Apart from this, there are quite a few tasks which unions in all industries will be required to tackle, such as greater efforts in improving treatment of non regular employees and drawing up a new strategy for wage demands in the light of the emerging new wage system.
US$=117yen （April 2, 2007)
