At next spring’s discussions, Japan’s biggest industrial union, UA Zensen, will seek a 6% overall salary raise, of which 4% will be base pay increases, a union spokesman said on Monday.

Annual salary discussions began on Monday and will finish on January 23, before Japanese blue-chip corporations present their wage raise strategy for next year in March.

This year, Japanese companies paid their employees the most in 30 years. Since the asset bubble broke in the early 1990s until this year, average Japanese workers’ earnings have stayed basically stagnant.

We strengthened the resolve for wage hikes, emphasizing the determination to ‘tackle’ the ‘basis of’ the wage hikes, instead of just aiming for around 6%,” the UA Zensen official said.

Under the umbrella of UA Zensen, around 2,291 unions represent 1.8 million workers in the service, textiles, distribution, and other sectors, making it Japan’s biggest sector-to-sector union.

On December 6, UA Zensen will officially present its executive plan for salary increases, and on January 23, it will decide on demands for the 2024 wage discussions, before spring negotiations with large firms complete in mid-March.

It would be the second year in a row that UA Zensen’s salary proposal would surpass that of Rengo, Japan’s biggest trade union confederation, which asked for 5% or higher pay increases next year earlier this month.

The average wage in Japan varies by area. It is also affected by characteristics like as workplace location, work experience, education level, and others. Taking all of these factors into account, an employee in Japan receives an average monthly wage of about 515,000 Japanese Yen (JPY), according to Wage Explorer. 

Salary is a significant component of the overall remuneration given to our workers by us as employers. As a result, companies must have well-defined wage structures and systems in place for all workers within the organization. The establishment of an ideal wage increment structure, as well as frequent evaluations of it, enables organizations to reward qualified personnel in a timely way while still keeping human resource costs under control.

A simple assessment of compensation levels is insufficient. As an employer, we must give salary increases based on the business circumstances and employee needs, which might take the shape of a percentage increase in the employee’s basic pay or one-time payments such as a bonus.