Japan's economy is showing increasing signs of recovery, yet there is nothing to cheer about concerning the job situation as labor and management brace for what promises to be yet another difficult bargaining season. Once again, wage restraint will be the main theme of negotiation in spring 2004.
The latest labor report from the Japan Business Federation (Nippon Keidanren) suggests the need for outright wage cuts. Meanwhile, the Japanese Trade Union Confederation (Rengo) is ready to give up unified wage demands for the third consecutive year, leaving the issue to individual member unions. However, it wants to hold its last line of defense: seniority-based pay.
Further dimming the outlook for the next wage round is a growing trend toward reviewing the decades-old wage system. Two factors appear to be contributing to this trend: continuing deflation, or falling prices, and business concerns about intensifying international competition.