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Shunto: Japan’s spring wage offensive

The Wikipedia entry doesn’t provide much help, but shunto is Japan’s annual spring wage negotiations, which are led by Rengo, the Japanese Trade Union Federation.

Kaho Shimizu led off a recent Japan Times Article on the upcoming shunto by stating:

Despite continued economic growth and record profits, a recent labor ministry report showing a drop in average real wages in 2006 underscores the reality that workers are not reaping any of the benefits.

The feeling is certainly growing. Conversations with workers in various industries have communicated a sense of impatience, frustration, and almost anger to me. Without a doubt, many of Japan’s workers are starting to feel frustrated. As one friend told me (in a paraphrased translation): “They’re saving so much money just hiring part-timers. The profit is obviously up and the guys at the top are happy. But no one in my division has gotten anything more than a 1% raise as long as we remember.”

Although Rengo President Tsuyoshi Takagi intends to change that, he’s going to face some stiff opposition. A recent Daily Yomiuri article put the issue of wage hikes in Japan versus continued capital spending rather clearly:

Unions call for a wage hike and an improvement in other labor benefits, citing the ongoing longest postwar period of economic boom, while management rules out the possibility of approving a uniform wage hike, citing the importance of investment in plant and equipment.

What does management have to say?

Toyota Vice President Mitsuo Kinoshita: “The Japanese wage level is among the world’s highest, so it’s extremely difficult to raise it.”

Fujio Mitarai, chairman of Keidanren (the Japan Business Federation): “Replacement of equipment lags behind in the manufacturing industry due to the protracted recession, so manufacturers must focus on investment in plant and equipment.”

Kazuo Tanigawa, an executive at Toshiba: “The benefits from improvement in corporate performance should be passed along in bonuses instead of a raise in pay scale.”

Someone recently told me that the old, “Our people are our greatest asset” management-speak sounds a bit trite these days. Maybe it does; or maybe it was just a lie.

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