Bad business conditions because of the global recession triggered by the financial crisis that originated in the United States took a toll on Japanese labor in this year's spring wage negotiations. Major carmakers and electronics companies told labor that they will not increase base pay and that bonuses will be lower than demanded.
The stance taken by these companies usually influence the response of other industries. Expect wage talks at medium-size and small enterprises, which are held after talks at larger companies, to become more difficult.
The severe stance at major companies derives from the fact that they expect huge operating losses for the business year ending March 31. Their survival has become top priority. Reflecting the difficult situation, they have decided not to raise base pay from the previous year's level. The aggregate effect of management's response could lead to tighter purse strings and thus delay the recovery of the Japanese economy.