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at His Press Conference

January 10, 2017

Spring Labor-Management Wage Dialogues

The final version of the 2017 Report of the Committee on Management and Labor Policy was discussed and approved today. It will be published on January 17.

During the three years since my appointment as Keidanren chairman, I have advocated wage rises to bring about a virtuous economic cycle. A turnaround has been achieved in pay scale increases, which had not taken place over the previous five-year period, but have now been implemented for three consecutive years. Bonuses have also been agreed at high levels, and the business community has played its part in stimulating a virtuous economic cycle. However, Japan continues to move toward ending deflation and revitalizing its economy, and the Report of the Committee on Management and Labor Policy shows determination to maintain momentum for wage increases. In more resolute terms than ever before, it urges companies that have expanded their earnings, and those experiencing a trend towards improved earnings over the medium term, to give positive consideration to wage increases in terms of annual incomes. I would like each company to consider, in light of its own circumstances, the optimum mix for wage increases, including periodic pay rises, pay scale increases, bonuses, one-off payments, and allowances.

Prime Minister Abe has requested wage rises of at least the same level as the previous year, pay scale increases for the fourth consecutive year, and discussion that takes account of the expected inflation rate. These matters are also mentioned in the report.

Although outcomes will depend on the results of talks at each company, I hope that this year's spring labor-management wage dialogues will maintain momentum for wage increases and build on last year's achievements to raise wages on an annual basis and implement pay scale increases for the fourth consecutive year.

Secondary Employment and Side Jobs

Although some enterprises allow secondary employment and side jobs, many have employment regulations prohibiting them and obliging employees to work solely for the company. There are positive aspects to secondary employment and side jobs, including human resource development and the broadening of employees' skills, but there are also many issues to be addressed, such as responsibility for social insurance and unemployment insurance premiums and management of working hours.

Keidanren regards breaking away from long working hours as an important issue, and is making efforts to reform working styles. Given this stance, we are reluctant to endorse secondary employment and side jobs, and are not presently in a position to wholeheartedly encourage them. The matter of secondary employment and side jobs needs to be carefully examined based on actual conditions and issues.

Japan-US Relation

The series of statements regarding companies made by President-elect Trump can be interpreted as signifying an intent to protect American jobs. In this context, it should be noted that Japanese companies have already made direct investments in the US amounting to $411 billion, directly or indirectly created 1.7 million jobs, contributed to the development of the US economy, and helped to expand US exports. If future policies to promote the US industry create an even stronger, more attractive business environment in the United States through regulatory reform, tax reductions, and infrastructure investment, Japanese investment in the US will expand further, leading to the creation of new jobs. Policy transparency and continuity will also be important, and I hope that policies will be devised with these factors in mind.

Although statements made on Twitter by Mr. Trump carry some weight since they come from the president-elect, they are not official policy statements by the President of the United States. Mindful of this distinction, we need to respond appropriately. We will carefully monitor what kinds of policies are actually set out in the inauguration speech on January 20 and subsequent presidential statements.

I understand that a Japan-US leaders' meeting will take place later this month, and the business community will take every opportunity to highlight the importance of Japan-US relations. The relationship between our two countries is a vital one in terms of not only politics and security, but also business. In particular, even if President-elect Trump acts upon his statements and announces on his first day in office that the US will withdraw from the Trans-Pacific Partnership, we will persevere in reminding the new US administration of the importance of free and open trade to the American and global economies. President-elect Trump has also suggested revising the North American Free Trade Agreement, but many Japanese companies have utilized this agreement to expand into North America and export goods to the US free of duty. Various restrictions will be imposed if this business model becomes unviable, and we need to continue monitoring the situation. The prosperity of America is built on free trade and investment, and I believe that President-elect Trump understands this, so I hope that he will take the US in an appropriate direction.

Keidanren has sent a mission to the United States in each of the last two years. During the 2015 mission we delivered speeches at meetings with the US Chamber of Commerce and other organizations throughout the country, but felt that Japanese companies' contributions to the US economy were not fully understood. To promote mutual understanding, this year we will send another mission to engage in dialogue with politicians and the US business community in Washington DC and elsewhere, and speak about the importance of free and open economies and the contribution of Japanese companies to the American economy.

Japan-Republic of Korea Relations

Although tension in relations between Japan and Korea continues, including the installation of a statue of a young woman near the Japanese consulate in Busan and the consequent recall of Japan's ambassador to the Republic of Korea, the direct effects of these events on the Japanese economy are limited. However, President Park's impeachment trial continues to cause political turmoil in Korea, and if this carries on it might impact upon the business activities of Japanese companies in Korea and interactions with Korean companies.

The 2015 agreement between Japan and Korea finally and irreversibly resolved the "comfort women" issue between the two countries. This agreement needs to be faithfully implemented.