United Workers’ Union Sets 2026 Spring Wage Hike Goal of Over 5%, Urges Price Pass-Through Support for Small Businesses

Union Leader Announces Wage Increase Target for 2026 Spring Negotiations

Naomi Yoshino, president of the Japanese Trade Union Confederation (RENGO), has announced a goal of achieving a wage increase of over 5% in the 2026 spring labor negotiations. To support small and medium-sized businesses, she emphasized the importance of fair price pass-through and proper transaction practices for companies [2].

This target aims to boost real wages to keep pace with rising living costs. RENGO is focusing not just on large corporations but also on spreading the benefits to small and mid-sized firms.

Background and Economic Context

Japan’s economy is seeing wage growth as a key driver of economic recovery, especially amid global uncertainties like the impact of the Trump administration’s policies. According to Asahi Shimbun, discussions are underway about the outlook for 2026, considering factors like the Federal Reserve’s interest rate policies and trade tensions with China, which could influence Japan’s economy [1].

RENGO’s efforts aim to address income inequality and improve workers’ living standards. With labor shortages worsening in small and mid-sized companies, securing funds for wage hikes is becoming urgent.

Specific Initiatives

• Wage increase of over 5%: Aiming for record-high raises, mainly through base pay increases (basic salary hikes).
• Promoting price pass-through: Ensuring subcontractors receive fair prices to secure wage increase funds.
• Enforcing fair trade practices: RENGO is urging government and business groups to build transparent and equitable supply chains.

Yoshino emphasized that the spring negotiations will help build a “sustainable wage growth model” [2].

Political and Economic Trends

Prime Minister Sanae Takaichi’s recent moves are also influencing the economic landscape. Democracy Times highlights the upcoming 2026 political challenges, including questions about the prime minister’s political longevity. The stability of economic policies could be a decisive factor in wage negotiations [3].

Strengthening US-Japan relations under the Trump administration is expected to positively impact wages in export-driven industries. Developments in immigration policies and tariff negotiations are also likely to affect Japanese companies [1].

Looking Ahead

The main wage talks are expected to kick off in late January. RENGO’s roughly 7 million member workers will shape national wage trends. If support for small businesses succeeds, it could lead to increased consumer spending and overall economic growth.

However, given the rising international uncertainties, some resistance from companies is anticipated. The outcome of labor-management negotiations will be closely watched.