Japan's traditional annual wage round, known as "shunto" (spring labor offensive), has collapsed for all practical purposes. As a union leader in the information sector points out, "This year marks a historic turning point for shunto." In fact, labor groups have given up customary wage demands, effectively forsaking their role as the "command center" for member unions.
On Wednesday major automotive, electronics and steel companies made "zero" wage offers to their unions, rejecting demands for "base-up" increases, the negotiated portion that excludes automatic raises linked to age. This means that the shunto has lost its main feature: orchestrated wage demands leading to across-the-board increases.
The collapse of the shunto is also evident in the mode of negotiation. In the past, employers made their final offers at least a day before the formal deadline, and almost always unions accepted the offers. This time around, final replies were not given until the last moment -- a sure sign that labor and management had great difficulty ironing out their differences. This happened even in well-off carmakers such as Toyota and Nissan.