URAYASU, CHIBA PREF. ¨C The Japanese Trade Union Confederation, or Rengo, formally adopted a plan Friday to demand a pay increase of 5% or more in ²õ³ó³Ü²Ô³Ù¨­ annual spring wage negotiations next year.

The umbrella body for labor unions across the country will seek a pay raise of at least 6% for small and midsize companies, also as part of its ²õ³ó³Ü²Ô³Ù¨­ policy.

Rengo will thus aim to achieve the levels of pay hikes attained this year to improve the living standards of workers in a country where inflation-adjusted real wages have kept falling.

The overall target of the 5% wage hike includes pay scale growth of at least 3%, Rengo said. The ²õ³ó³Ü²Ô³Ù¨­ policy also establishes a numerical target for wages of nonregular workers, such as part-timers, for the first time, envisioning an increase of 7%.

¡°If (inflation and wage increases) are not balanced, the economy will shrink, and we will fall back to ¡¯the lost three decades¡¯¡± of low growth and deflation, Rengo President Tomoko Yoshino told a central committee meeting in Urayasu, Chiba Prefecture.

She emphasized that the 2026 ²õ³ó³Ü²Ô³Ù¨­ talks will be a ¡°crucial moment of whether or not Japanese society will be able to establish wage increases as a norm and break away from the deflationary mindset.¡±

According to Rengo, the weighted average of wage increases in the 2025 ²õ³ó³Ü²Ô³Ù¨­ was 5.25%, exceeding 5% for the second consecutive year.

However, wage growth has not kept pace with price increases. Real wages slid year on year for nine consecutive months until September.

The wage increase rate for small and midsize labor unions was also lower than the overall rate, showing a wider gap with bigger entities.

In its 2026 ²õ³ó³Ü²Ô³Ù¨­ policy, Rengo said that despite accelerated wage hikes over the past three years, ¡°only a few people feel their lives have improved.¡±

To boost personal consumption and create a virtuous cycle of the economy, ¡°it is essential to spread wage hikes to small and midsize companies and address disparities,¡± it also said in the policy.

Labor unions under Rengo will work on their ²õ³ó³Ü²Ô³Ù¨­ policies to prepare for next year¡¯s labor-management negotiations, which are seen going into full swing as early as February.