On ‘2024 Keidanren Report on Management and Labor Policy’

Kurosawa Koichi
Secretary General
National Confederation of Trade Unions (Zenroren)
January 18, 2024

The Japan Business Federation (Keidanren) on January 16 published its “2024 Report of the Committee on Management and Labor Policy”, which provides guidelines for the business sector in the upcoming 2024 Shunto (Spring Struggle), labor talks.

■ Corporations must fulfill their social responsibility to give a big pay raise to make up for falls in real wages that have continued more than 30 years

The report proudly states that last year marked the highest wage increase in 30 years, adding that it is a social responsibility of Keidanren and corporate businesses to contribute to realizing “structural wage increases.”

But the real fact is that Japanese workers’ wages are declining unabated. In November 2023 figures, the real wages fell 3.0 percent from a year earlier for the 20th straight month, forcing many working people to endure hardships for many months. In international comparison, Japan is an abnormal country with the real wages falling for about 30 years.

The report fails to admit the mistake of an indefinitely expanding the use of contingent workers and suppressing the workers’ demands by introducing the systems of productivity and personnel evaluation. The fact of the matter is that, urged by the cry of people experiencing hardships from soaring prices, the business sector only agreed to give a pay raise within an acceptable range based on performance. We cannot overlook the fact that the report ignores the extremely low wages for contingent workers, women workers, and essential workers, including care workers.

In the 2024 Shunto, we are demanding a substantial increase in real wages, from bottom up. In Japan, the real wages have been in decline over the past 30 years.

■ For wage increase that will narrow economic inequalities and defend human rights for contingent and women workers everywhere in Japan

The report stresses the importance of investing in manpower, but it also asks employers to positively consider and implement wage increases that are conducive to forming a larger middle class.

Meanwhile, the large companies are leading the degeneration of wage system through replacing the seniority-based wage system with individual wage system and through introducing a job-type employment system or based on personnel evaluation. This only helps to widen wage gaps inside and outside of companies. If the business sector wants to see a larger middle-class formed, it should call for narrowing the wage gaps.

Regarding the use of contingent workers, the report calls for the need to do more to raise wages and improve their treatment, or hire them as permanent full-time employees, which would consequently contribute to narrowing the wage gap between men and women. But the business sector’s measures fall short of efforts toward realizing “equal pay for equal work” or achieving stable employment. It should make efforts to reduce all forms of inequality to defend the working people’s human rights instead of serving corporate personnel strategy.

■ Amend law to establish a national uniform minimum wage system toward 1,500 yen now and 1,700 yen in future

Regarding the minimum wage, the report refers to the relationship between the method for determining the amount and timing of a raise. However, it strongly stresses the need to pay attention to the ability to pay wages and fails to see the fact that there is a big discrepancy between minimum wages and cost of living. An increasing number of workers are paid near minimum wage because the large corporations and administrative authority have pushed ahead with easing regulations and helped companies to use more contingent workers through cutbacks on prices they pay to suppliers as part of cutting costs.

It would be difficult to give a big increase in the minimum wage and redress the regional disparity even if discussion is continued at the minimum wage council by taking the regional disparities for granted and considering the corporate ability to pay. As a consequence you cannot expect any drastic increase in Japan’s minimum wage, which is less than half the international average. The unevenly heavier population distribution in urban areas and the increasing regional economic distress are further exacerbated. We demand that the Minimum Wage Act be revised to establish a uniform national minimum wage system and that the minimum wage be immediately raised to 1,500 yen per hour. We also call for a policy that will further increase it to 1,700 yen. We demand that large companies pay higher unit prices to suppliers in accordance with the wage increases and that the large companies engage in fair trade with small- and medium-sized businesses. ,

■ Stop ‘Three-Pronged Labor Market Reform’ from being promoted based on the workers’ self-responsibility

The report highlights the promotion of improved productivity through smooth labor mobility. It is hinged on human resources used as capital by companies. It encourages workers to do new learning or gain new skills as part of the promotion of labor mobility paving the way for diverse work styles. It also urges the government to push ahead with the promotion of its “Three-thronged Labor Market Reform”, which is based on the view that the main cause of stagnant wages is lack in the workers’ personal empowerment and to create a system allowing employers to use severance money when dismissal does not have legal effect.

We demand that the business leaders rectify their extremely selfish and irrelevant explanation that blames Japan’s low wage structure on the lack of the workers’ ability or enthusiasm to carry out jobs. They stress the need to introduce the wages attached to a post. But its aim is to cut wages to compensate for the workers’ livelihood in an attempt to hold down wage levels. It is nothing but a system used to dismiss workers or force them to find other jobs on the grounds that they do not fit in with a job imposed arbitrarily by a company. We demand that Keidanren immediately rectify its promotion of the “Three-pronged Labor Market Reform” to force the workers to take responsibility for what’s happening to them and promote the cost-cutting corporate restructuring policy.

■ Large corporations should use a part of their internal reserves to fulfill social responsibility

The large corporations have been increasing their internal reserves for 11 straight years to 554.8 trillion yen, up 7.4 percent from the previous year. In one of the topics(column) in the report: “What internal reserves should be,” the report argues that “Possessing certain amount of cash on hand contributed to restraining companies from going bankrupt, or preventing the labor market from worsening.” The unlimited accumulation of wealth clearly has drastically weakened Japanese companies’ international competitiveness, putting the future of the Japanese economy at risk. But the report has no remorse over these consequences. In these circumstances, the business sector is obliged to respond to social criticisms by implementing fair trade or raising wages.

The report mentions “massive strikes being organized for the first time in several decades” and stresses the importance of “broadly sharing industrial relations to creatively work together instead of getting into strife.”

In the 2024 Shunto (Spring Struggle) Zenroren will make efforts to bring together workers to have high negotiating power or concerted struggle, including strike, to demand a equitable society which realizes a substantial wage increase from bottom up, equal treatment for all workers, a uniform national minimum wage of 1,500 yen, ending economic inequality so that everyone can lead a decent life if they work seven hours a day. Zenroren stands firm against the government plan to carry out the “Three-thronged Labor Market Reform,” which is designed to gut the labor rights and other labor law protections, including adverse revision of the law on working hours. Zenroren demands the large corporations fulfill social responsibility by using a part of their internal reserves in the workers’ interests while serving the revitalization of regional economies.