Firms, labor unions on collision course

[FarCenter]

http://www.yomiuri.co.jp/dy/business/20081218TDY03103.htm

Sachio Nikaido and Katsuki Honda / Yomiuri Shimbun Staff Writers

Next year's spring labor-management negotiations, known as the shunto, likely will be more confrontational than in recent years due to the increasing number of workers who are at risk of being made unemployed. In a report outlining its stance for the next shunto, the Japan Business Federation (Nippon Keidanren) urged the need for labor-management cooperation to overcome the worsening business environment. However, the Japanese Trade Union Confederation (Rengo) plans to demand a uniform basic pay hike for the first time in eight years, putting it on a collision course with employers.

Following the announcement of the report Tuesday, Nippon Keidanren Chairman Fujio Mitarai said at a press conference that it will be difficult for companies to accept the demand for a uniform pay hike. "The economy is in very bad condition. I believe only a few companies can accept demands for a uniform basic wage increase," he said. According to a private credit research agency, the recurring profit total of companies listed on the Tokyo Stock Exchange's First Section for the term ending March 31 2009, likely will fall 24.5 percent from a year ago.

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Meanwhile, labor unions are intensifying their opposition to the employers' stance. Industrial labor union organizations plan to present higher-level demands than those put forward in 2008. For example, the General Federation of Private Railway & Bus Workers Union Japan plans to demand a uniform basic pay hike of 7,000 yen. Labor unions will demand a uniform basic pay rise despite worsening economic conditions, as they predict that price levels will go up by about 1.5 percent. As living expenses have risen this year, labor unions insist that real salary levels have fallen. In addition, while executives' pay and shareholders' dividends rose during the economic upturn phase in recent years, workers' salary levels did not. The labor unions therefore felt that benefits from the economic upturn did not reach many workers. "Two years hence, the economy might have worsened further," a senior labor union official said. "We want to win pay hikes in the 2009 shunto."

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Prime Minister Taro Aso said of the report: "The government is sparing no effort with regards to employment security. Though I understand the current situation is very difficult, I want companies to make more efforts to fulfill their social responsibility."