Rengo to seek pay hikes of at least 5% in 2027 negotiations

The Japanese Trade Union Confederation, or Rengo, plans to demand pay increases of 5% or more in annual spring wage negotiations for the fourth straight year in 2027.

The umbrella body for labor unions across the country aims to solidify the trend of wage increases by setting high pay increase targets, despite growing economic uncertainty amid the unstable international situation.

For small unions with fewer than 300 members, Rengo will seek pay increases of at least 6%, the same as this year, to narrow the wage gap between large and small companies.

Although Japan’s inflation-adjusted real wages have turned upward thanks to substantial wage hikes in recent years, the country’s wage levels are still not high by international standards. Rengo therefore will call on management to make aggressive investments in human resources.

As part of the overall pay increase targets, Rengo will call for pay scale hikes of 3% or more.

The umbrella body is set to adopt the 2027 targets at a central executive committee meeting later this month and formally approve them at a central committee meeting in December.

Industry-specific union federations and individual unions will draw up their specific pay hike demands based on Rengo’s targets.

According to a Rengo survey, the 2026 negotiations, known as shuntō, achieved an average wage hike of 5.01%, falling below the 5.25% level seen in 2025 but reaching 5% for the third consecutive year. This equaled a monthly wage increase of ¥16,400.

The average, however, stood at 4.69% for small unions, amounting to ¥12,866 per month, highlighting the wage disparity with unions at large companies.