REPEAT: Japan Rengo To Demand About 2% Base Wage Hike In FY18

Repeats Story Initially Transmitted at 00:00 GMT Oct 16/20:00 EST Oct 15

     TOKYO (MNI) - The Japanese Trade Union Confederation (Rengo), the nation's

largest labor organization, is expected to call for about a 2% raise in base pay

for workers in next spring's wage negotiations, the Nikkei reported Sunday.

     This would be the fifth consecutive year that Rengo has demanded a wage

hike, following the similar call for about a 2% hike in the current fiscal year.

     The average base wage hike for Rengo members, including regular salary

increase, in the current fiscal year was 1.98%, the first time in four years

that the wage hike was below 2%.

     Many companies are raising wages for non-regular workers to ensure

sufficient labor supply due to continued tight labor market conditions. But they

remain cautious about raising wages for regular workers as this permanently

increases its cost base in a competitive environment. 

     The seasonally adjusted average unemployment rate stood at 2.8% in August,

unchanged from July and June. Backed by rising job offers, the 2.8% unemployment

rate, which was also seen from February to April this year, remained at the

lowest level since June 1994, when it was also 2.8%.

     Bank of Japan and government officials have been calling on firms to raise

base wages not only to stimulate private consumption but also to overcome years

of deflation.

     The BOJ board in July pushed back the estimated timing of hitting the 2%

inflation target to "around fiscal 2019" from "around fiscal 2018."

--MNI Tokyo Bureau; tel: +81 90-2175-0040; email: hiroshi.inoue@marketnews.com

--MNI BEIJING Bureau; +1 202-371-2121; email: john.carter@mni-news.com