Japan’s Largest Labor Union to Seek 5% Pay Hike Next Year

Japan’s largest labor union has decided to demand a wage hike of at least 5% in next spring’s annual labor-management negotiations, maintaining the same target as this year to sustain momentum amid persistent inflation, Kyodo News reported.

In the 2025 negotiations, Japanese firms agreed to raise wages by an average of 5.25%. (Photo: Japanese Trade Union Confederation (RENGO) 

In its basic policy for the 2026 “shunto” wage talks, the Japanese Trade Union Confederation, also known as Rengo, said it aims for a real wage increase of 1% in line with the government’s goal.

Real, or inflation-adjusted, wages are a key barometer of consumer purchasing power, Mainichi Japan also reported.

In the 2025 negotiations, Japanese firms agreed to raise wages by an average of 5.25%, marking the second consecutive year in which increases exceeded 5%, according to Rengo’s final tally.

Rengo said it will call for an overall pay hike of 5% or more, including a base-pay rise of at least 3%, while encouraging unions representing small and medium-sized enterprises — which employ around 70% of the country’s workforce — to set higher goals of 6% or more to narrow the gap with larger companies.

The union also said it will seek a minimum hourly wage of ¥1,300 ($8) or higher, up ¥50 from this year’s negotiations.