The Ministry of Employment & Labor announced on July 6 that 4,615 out of 10,571 companies, each with 100 or more employees, have finished their wage negotiations for this year as of the end of last month. The ratio, 43.7 percent, is the highest since 2000, when it reached 47.5 percent. Also, it is equal to that of 1998 and about 2.5 times that of the same period of last year.
The 4,615 companies showed an increase in ordinary wages of 4.9 percent, 14.2 percentage points lower than a year ago. Last year’s exceptionally high rate of increase was because a lot of companies expanded the scope of ordinary wages according to the Supreme Court ruling. This year, those companies recorded an increase in total wages, which includes bonuses and the like, of 4.3 percent. The percentage was 4.7 percent in 2014.
A total of 819 out of them (17.7 percent) froze or cut their wages, whereas the ratio had been 9.2 percent a year ago. 48.0 percent of the 4,615 firms mentioned corporate and individual performances as the most important variable in the negotiations. It was followed by an increase in minimum wage (25.1 percent) and the amount of salaries paid by the other firms in the same industry (9.4 percent).
It seems that the negotiations have been completed with no increase in pay in a relatively larger number of companies this year, because the economic recession is still going on, while the scope of ordinary wages is becoming clearer. In addition, employers and employees are trying to reduce uncertainties by wrapping up the talks early, with the wage peak becoming a hot issue ahead of the implementation of retirement at 60 scheduled for next year. For reference, the increase in ordinary wages had been 5.3 percent in 2011, 5.6 percent in 2012, and 4.4 percent in 2013.
In the meantime, the ratio of companies that have finished their negotiations amounted to 53.1 percent, 34 percentage points higher compared to a year earlier, when it comes to those without labor unions. The ratio stood at 17.9 percent for those with labor unions, 44.9 percent for those employing less than 300 people, and 31.5 percent for those with 1,000 or more employees.