An Exchange of Views among government, labour and management involving the government, RENGO (Japanese Trade Union Confederation), Keidanren (Japan Business Federation), and JCCI (Japan Chamber of Commerce and Industry) was held at the Prime Minister’s Office on November 26. This marked the first such meeting since the inauguration of the Ishiba administration, with discussions focusing on the 2025 Spring Labour–Management Negotiations and medium-term policy for future increases in the minimum wage.

Prime Minister Ishiba made the following remarks at the beginning of the meeting:

The government aims to overcome deflation and realize a growth-oriented economy, targeting an economic structure where wage increases consistently outpace inflation. For this reason, we have high expectations for significant wage hikes, including base pay increases, in next spring’s labour–management negotiations. We also emphasize the importance of extending this momentum to small and medium-sized enterprises (SMEs) and regional areas.

To support wage growth, the government is formulating comprehensive economic measures focused on ensuring fair trade practices, promoting investment in digital transformation, developing human resources, and strengthening the foundation of SMEs. We aim to secure the early passage of the supplementary budget.

Regarding minimum wage increases, we have set a goal of achieving a nationwide average of 1,500 yen during the 2020s and are exploring concrete measures through discussions among government, labour, and management.

Furthermore, the government is committed to thoroughly ensuring price pass-through and promoting the establishment of local government–labour–management meetings. These efforts aim to improve the wage increase environment in regional areas and SMEs.

The government seeks to promote understanding of the necessity for “courageous wage increases” and plans to compile specific measures by next spring to create an environment where society as a whole shares an understanding of the importance of wage hikes.

Through these initiatives, the government aims to build an economy where people can truly feel a sense of prosperity.

Rengo President Yoshino made the following remarks:

Next year must mark the end of the chronic deflation that has persisted for a quarter of a century, placing wages, the economy, and prices on a stable cruising track. It is essential to break away from the current situation of “neither wages nor prices rising” and ensure that wage increases that improve living standards become social common sense.

We call on the government to establish the following six foundational measures:

1. Ensure thorough cost pass-through of labour expenses and promote fair trade practices, including at the municipal level.
2. Strengthen support for small and medium-sized enterprises (SMEs) that implement wage increases.
3. Develop policy responses for industries with low wage growth rates.
4. Implement local government–labour–management meetings.
5. Revise the Subcontract Act and other regulations to respond to the new era
6. Conduct sound macroeconomic and social management, including stabilizing prices and exchange rates.

Regarding the minimum wage, achieving the government’s target of 1,500 yen by the mid-2030s will require enhanced support for SMEs and fair price pass-through. Rengo has set a medium-term goal of establishing a minimum wage equivalent to 60% of the median wage for regular workers, aiming to raise the minimum wage to approximately 1,900 yen by 2035.

Addressing regional wage disparities remains a challenge. Rengo emphasizes the importance of discussions within the framework of the Minimum Wage Act involving public, labour, and management representatives.

Keidanren Chairman Masakazu Tokura shared the following comments:

The 2023 Spring Labour–Management Negotiations achieved the highest wage increases in nearly 30 years, and this momentum accelerated in 2024. By 2025, we aim to solidify structural wage increases, with particular emphasis on improving conditions for small and medium-sized enterprises (SMEs) and fixed-term contract workers. It is also crucial to ensure thorough price pass-through and establish the principle of appropriate pricing for quality products as a social norm.

The government needs to create an environment for raising the minimum wage. While discussions are underway to achieve a nationwide average of 1,500 yen, it is important to recognize that the minimum wage applies universally to all companies and carries penalties. Therefore, the target should be set within a realistically achievable range, and deliberations should be conducted carefully through the tripartite council of public, labour, and management representatives.

An Exchange of Views between Government, Labour and Management was held ahead of the 2024 Spring Labour–Management Negotiations. During the meeting, Keidanren expressed the view that “contributing to the realization of structural wage increases is a social responsibility of Keidanren and its member companies.”

The government’s position emphasized the need to transition from the cost-cutting economic model that has prevailed for over 30 years to a new economic paradigm driven by a virtuous cycle of income growth and economic expansion. Achieving structural wage increases that surpass inflation is seen as essential for this shift.

It appears that the environment is finally aligning to allow Japan to break free from the “Lost 30 Years” characterized by stagnation in the economy, wages, and citizens’ livelihoods. With government, labour, and management largely united in direction, now is an opportune moment to solidify structural wage increases.

In this context, the 2025 Spring Labour–Management Negotiations will be a critical juncture. We look forward to earnest discussions between labour and management that will consider both the future of people’s lives and the long-term prospects of the Japanese economy.

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