KEIDANREN SAYS ACROSS-THE-BOARD PAY HIKES IN JAPAN ‘UNREALISTIC’

Japan's most powerful business lobby Keidanren said that it views basic pay increases across all sectors as "unrealistic" in annual wage talks, as the coronavirus pandemic has hit some firms and industries harder than others.

In guidelines for corporate managers who will engage in wage negotiations with labor unions over the coming months, the lobby, also known as the Japan Business Federation, said companies should be given more leeway this year regarding whether to raise wages, citing the worsening business environment due to the spread of the novel coronavirus.

The Japanese Trade Union Confederation, the country's largest labor organization known as Rengo, is set to demand a hike of around 2 percent in basic pay in forthcoming management-labor wage talks, but the coronavirus pandemic has made the outlook uncertain for businesses.

Underscoring that the pandemic's impact on each company or sector differs, Keidanren said it would be difficult for firms that have seen business deteriorate to raise basic pay and their priority would be on continuing to operate and maintaining jobs.

For those companies benefiting from increased earnings, a base pay hike should be "an option," according to the guidelines. In recent years, the government has asked companies to raise wages to support households and spur consumption.

The government of Prime Minister Yoshihide Suga, who succeeded Shinzo Abe in September, is also calling for a pay hike this year, though the pace of wage growth is expected to slow.

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