The Japanese Trade Union Confederation (Rengo) proposed a 6% central benchmark for total pay gains in Japan’s 2027 spring talks, while pressing for wage growth to reach smaller companies and workplaces without unions.
Rengo’s Oct. 22 basic concept calls for total increases of 6% at the center and at least 5%. The target includes regular raises. For base-pay increases alone, Rengo set a separate central benchmark of 4%, with a minimum of 3% or more. Member organizations will set their own standards based on industry conditions, current wage levels and the economic situation.
In the latest completed spring round, 5,368 unions reported a weighted average monthly increase of ¥16,400, or 5.01%, Rengo’s final tally showed. Among the 3,732 unions reporting base-pay increases separately, the average was ¥11,510, or 3.50%. The overall result exceeded 5% for a third consecutive year; the comparable 2025 figure was 5.25%.
A separate March tally showed that 2,508 unions sought an average increase of 5.94% in 2026. The demand and settlement figures cover different stages and groups. Rengo’s new central target is close to that earlier average demand, though it does not establish what unions will seek or secure in 2027.
Rengo says many people do not feel their living standards have improved, despite real wages turning positive after four years, and that consumer spending remains weak. It also wants raises to reach more smaller companies and workplaces without unions. If unions secure larger increases, workers would receive more pay while employers would face higher labor costs.
The concept also sets a medium-term wage-level goal for the first time, aiming for levels about 15% above current estimates by 2030. Benchmarks include monthly median wages of ¥360,000 for workers aged 35 and ¥340,000 for those aged 30.
Reuters reported that economists expect actual 2027 settlements to remain around 5%. Takayasu Kudo, the senior economist for Japan at Bank of America Securities Japan, sees ongoing hiring constraints, company earnings and labor’s declining share of income as reasons for gains near the 2026 pace, Reuters reported. Naoki Hattori, who serves as chief Japan economist at Mizuho Research Institute, cautioned that raises above about 5% could lead companies to offset payroll costs with price increases, adding to pressure from rising wages and prices, Reuters reported.
Rengo’s Central Committee is scheduled to confirm the formal 2027 policy on Dec. 2, 2026.
