Coronavirus outbreak overshadows Japan’s shuntō wage talks

The spread of the coronavirus originating in China has started to affect Japan’s annual shuntō wage negotiations.

Tougher wage talks are expected this year, with the management side increasingly cautious about granting pay hikes amid growing concerns over corporate performances.

The Japanese Trade Union Confederation, or Rengo, has decided to cancel a large-scale rally set for March 3 in light of the COVID-19 outbreak. A senior Rengo official said the umbrella body for labor unions across the country is concerned about holding large gatherings.

The rally, which was expected to be attended by over 1,000 people, was meant to bolster the morale among members toward March 11, when many major firms are scheduled to show their wage proposals to the labor side. Rengo is considering holding an event online instead.

The Japanese Electrical Electronic & Information Union, an umbrella organization for labor unions at electric machinery makers, plans to reduce the number of participants at a committee meeting in which representatives from 13 unions, including those at Hitachi Ltd. and Panasonic Corp., will decide the group’s negotiation policy.

According to the umbrella body, which has some 570,000 members, the number of participants will fall to some 60 from the normal levels of about 200. Representatives from smaller member unions will watch the session online.

This year’s talks have already started, with the unions at automakers and major electronics makers submitting their wage requests to management by last Thursday.

The focal point is whether momentum for wage hikes will be maintained at a time when global economic growth is decelerating due partly to U.S.-China trade friction.

Hitachi Senior Vice President Hidenobu Nakahata said that the business and economic condition looks tougher for wage hikes than last year due to factors including the consumption tax hike from 8 percent to 10 percent last October and adverse effects of the coronavirus outbreak on consumption and production.

Meanwhile, Takahiro Nonaka, head of the Japanese Electrical Electronic & Information Union, said, “We’ll strongly call for wage hikes because fair redistribution to laborers has yet to be carried out although corporate earnings could be hit hard if the supply chain disruption (in China and elsewhere) continues for an extended period of time.”

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