Japanese companies facing labour crunch under pressure to hike wages

TOKYO (The Japan News/ANN) - As labour-management talks for the year reached their climax on Wednesday, management at major Japanese companies made clear their cautious stance on offering their workers a pay-scale increase, which raises the level of base pay across the board.

Advocating its position of getting rid of the type of spring labor talks whereby the government takes the lead in encouraging management to increase pay, major companies had earlier been prepared to raise wages of their own volition, through labor-management talks alone.

 Faced with growing economic uncertainties and concerned about intense competition with foreign companies, the impetus for raising wages has been weak.

 “It has much to do with the U.S.-China trade friction and China’s economic slowdown. As economic conditions are harsher than last year, it [the burden of wage hikes] has become heavier for the company. That’s the conclusion our company has reached,” said Hidenobu Nakahata, a representative executive officer at Hitachi, Ltd.

 His remarks were made Wednesday as he explained why Hitachi’s proposed pay hike for this year was smaller than the one last year.

 Yet it is not only because of uncertainties over the global economy that many companies in the automobile and electronics manufacturing sectors ― industries that underpin the Japanese economy ― have been wary of offering wage hikes.

 There is also a strong sense of alarm over their survival amid ever-fiercer global competition, which has become obvious with the wage negotiations concluded at Toyota Motor Corp., the largest company in Japan.

 In contrast to the circumstances surrounding automobile and electronics makers, which lack momentum to hike wages, some companies in industries that have been beset by serious labor shortages, such as operators of food and transport services, have embarked on raising wages aggressively to secure staff.

 At Fukuyama Transporting Co., a leading land transport company, labor and management reached an agreement on March 9 that the company will give its about 13,500 truck drivers a large increase in their basic pay: a monthly wage hike of ¥7,500 (the pay hike demanded by the labor side was undisclosed), or three times as much as the one offered last year.

 The company is moving ahead with measures to secure staff by improving the treatment of its workers, giving all its regular workers ― about 20,000 in total ― a one-time payment of ¥50,000 across the board in their monthly payment for March.

 According to the Land, Infrastructure, Transport and Tourism Ministry, the ratio of job openings to applicants for truck drivers was 3.03 to 1 in January, up 0.27 percentage points from the same month last year. This reflects people’s tendency to shy away from such jobs, which are known for long working hours and low wages.

 It is a similar story at restaurant chain operators.

 At Ohsho Food Service Corp., which operates a Chinese restaurant chain with gyoza dumplings as its main business, labor and management reached an accord stating that the company would raise its workers’ monthly wage by ¥12,677, despite the labor side having demanded a monthly increase of only ¥9,500. The company said the hike would lead to improving the working environment.

 Zensho Holdings Co., which operates Sukiya, a leading gyudon beef bowl restaurant chain, raised the starting salary for new college graduates joining the company this spring from ¥210,000 to ¥215,000, although the base pay hike for its workers was smaller this year than last year. It is the first time in two years that the starting salary for college graduates has been raised. The hike is aimed at securing staff by improving the treatment of younger workers.

 Among small and medium-sized companies, the labor shortage is more serious than at larger ones, even bringing about such circumstances as contributing to hardships in corporate management.

 According to a survey taken by the Japan Chamber of Commerce and Industry, the number of small and medium-sized companies that have complained of labor shortages has been increasing since 2015, with 65 percent of them making such complaints in 2018.

 A components-processing firm in central Tokyo said, “We can barely afford it but we have to squeeze wages out in order to secure workers.”