EDITORIAL: Spring labor offensive

This year's shunto, the nation's annual spring wage offensive, has begun at a time when there is little hope of ending the deflationary recession.

While trade-offs between companies and labor unions are important, these negotiations must also be seized as an opportunity for labor and management to determine how best to reward the work of the young people destined to shoulder the burdens of tomorrow's world.

Since the 2008 global economic crisis, Japan has mounted a comeback when measured by the benchmarks of gross domestic product and corporate earnings. Profits generated, however, tend to be earmarked for shareholder dividends and internal reserves. Little is channeled back into wages. There is also belt-tightening in capital investment, while job growth is stalled.

With a shrinking domestic market linked to the declining birthrate and aging population, along with high prices of crude oil and other resources, caution in the corporate sector is understandable. Then again, consumption will never flourish with wages and employment in the doldrums, and corporate activity will also remain flat.

The labor unions in charge of wage hike demands are also short on vigor. Part-timers, agency temps and other nonregular employees today account for one-third of the work force, a factor that saps bargaining power.

Fears of industrial hollowing from the yen's appreciation also cast a dark shadow. The Confederation of Japan Automobile Workers' Unions has decided not to make collective demands as "distress factors" run deep.

The Japanese Trade Union Confederation (Rengo) is demanding a hike in wealth sharing with workers equal to a 1-percent hike in total compensation, including allowances. Nippon Keidanren (Japan Business Federation) is already balking at that, stressing "jobs over wages."

The federation also refuses demands for wages hikes for nonregular workers above those of regular employees via conversion to hourly wages, thereby seeking to narrow the widening pay gap.

The management side is set to accept continuation only of the regular annual wake hikes. Such a scenario does not bode well for a rebound in consumption.

During the accelerated economic growth period of the postwar era, Japanese corporate managers are said to have fueled consumption through profit sharing rooted in consideration for employees, shareholders and internal reserves alike. The current situation underscores the need to return to such a balanced approach.

Since the 1990s, there has been a trend to applaud businesses that cut labor costs and raise shareholder dividends as "good companies." In fact, such policies were effective in taking the scalpel to the bloated management styles responsible for the period of asset-inflated bubble economy.

Today, however, just being a nonregular employee, despite performing the same basic work as regulars, is justification for far lower wages. This is hurting worker morale.

In a survey tracking worker sentiment compiled last spring by the Rengo Research Institute for Advancement of Living Standards, the majority of respondents predicted wages in five years will be no higher than today. Among those in their 20s and 30s--members of the work force in the midst of honing their skills--over one-third of men and 50-60 percent of women expressed such a view.

This conjures up images of the child-rearing generation, a segment normally distinguished by hearty spending habits, losing hope in the future and cutting back on consumption.

Though things are tough, we must resolve how to fairly reward members of the younger generation for their work. Labor and management, at both the corporate and industry level, should discuss this issue so as to devise a means to better inspire and encourage today's youth.

In striving to defeat deflation, greater praise must be heaped on companies determined to raise wages and employment. In that spirit, we support this year's shunto as a forum to seriously confront the pressing issues of our times.

--The Asahi Shimbun, Jan. 19