What is Shunto ? How does is have influence on wages in Japan ?

16% of Japan’s Workforce Directly Benefit from Shunto

Shunto, also known as the Spring Wage Offensive, is an annual event in Japan where labor unions negotiate wages for their members with employers. It’s a crucial process that sets the tone for wage adjustments across the entire country, even for non-unionized workers.

Latest Shunto Achievements
In 2023, Shunto negotiations resulted in the highest wage increase in 30 years, exceeding 3%. This is a positive sign for the Japanese economy, as it indicates a potential for increased domestic demand and economic growth.

The Etymology and History of Shunto
The word “Shunto” (春闘) comes from the Japanese characters “haru” (春), meaning “spring,” and “tō” (闘), meaning “struggle” or “fight.” So, the term literally translates to “Spring Struggle.” This name reflects the historical roots of Shunto in the labor union movement’s fight for better wages and working conditions in the post-war period.
Shunto began in 1955 as a way for unions to catch up with the economic prosperity of the era. Back then, the goal was to achieve wages comparable to those in Europe and the US. Over the years, Shunto has become a well-established tradition that sets a benchmark for salary increases throughout Japan.

The Negotiation Process
Shunto negotiations typically take place between February and April. Major labor unions, led by industrial unions, come together to present a unified set of demands to employer associations. These demands are based on factors like inflation, economic growth, and corporate performance. Negotiations can be intense, sometimes even involving threats of strikes.

The Impact of Shunto
The outcome of Shunto negotiations has a ripple effect throughout the Japanese economy. The agreed-upon wage increase for unionized workers often becomes a benchmark for wage adjustments in non-unionized companies as well. This helps to ensure a certain level of fairness and consistency in wage trends across the country.

Shunto also plays a role in boosting domestic demand. When workers receive higher wages, they have more money to spend on goods and services, which can stimulate economic growth.

The Future of Shunto
In recent years, Shunto has faced challenges due to factors like a shrinking unionized workforce and economic stagnation. However, it remains an important mechanism for wage determination in Japan and is likely to continue to play a significant role in the country’s labor market.