As part of the 2024 Shunto (annual wage negotiations typically held around February/March) involving the steel industry, the 3 major integrated steel producers in Japan (Nippon Steel, JFE Steel and Kobe Steel) and several other companies responded to the wage increase requests made by labor unions. Among integrated steel producers, Nippon Steel agreed to a wage improvement (equivalent to a base pay raise) of 35,000 yen, while JFE Steel and Kobe Steel agreed to improve wages by 30,000 yen. This marked the first time in 50 years that the amount of wage improvements surpassed the highest record set in 1974, when the companies agreed to raise wages by 23,000 yen. This also marked the first time in 68 years that the amount of wage improvements were different among the 3 major integrated steel producers. Japan’s population has continued to age while also having a declining birthrate, and it is becoming increasingly difficult for companies to secure and develop human resources. Companies including integrated steel producers have deemed that it is essential for them to significantly improve working conditions in order to secure promising human resources and prevent employees from leaving their companies.
Nippon Steel Executive Officer Mr. Tadamitsu Miyoshi (Head of Personnel and Labor Policies) held a press conference to explain the company’s decision regarding making significant improvements to wages and also other matters. Mr. Miyoshi stated “In order for Nippon Steel to return to becoming the world’s leading company in terms of comprehensive capabilities, we decided that our wages also need to return to being among the highest levels in the manufacturing industry. One other aim of our decision is to secure promising human resources toward overcoming the challenges we face both domestically and overseas.”
In addition, Nippon Steel announced that they will make revisions to starting salaries as well, and after the revisions college graduates will be paid 256,000 yen (41,000 yen increase from current starting salary) while high school graduates will be paid 210,000 yen (30,000 yen increase).
As for JFE Steel and Kobe Steel, the 2 companies agreed to fully accept the labor unions’ requests for a wage increase of 30,000 yen. Additionally, Kobe Steel agreed to fully accept requests for an increase in holidays (2 days) and for an improvement in the late-night extra pay rate (to be raised to 40%). In order to realize increases in holidays and improvements in late-night pay, the company will need several thousand yen of capital per employee. Therefore the total amount of financial resources that the company will spend for each employee will increase by over 30,000 yen.
Furthermore, the 3 integrated steel producers have agreed to a separate wage hike of 6,700 yen to maintain the wage structure (equivalent to a regular pay raise). If this wage hike is included, the total wage increase will be 41,700 yen in the case of Nippon Steel, and 36,700 yen in the case of JFE Steel and Kobe Steel. In terms of Nippon Steel, their wages will increase by a rate of 14.2%.
Ever since 1957, the 3 major integrated steel producers had continued to raise base pay by an equal amount. During the above-mentioned press conference, Nippon Steel’s Mr. Miyoshi explained that their company raising base pay by a different amount from the other 2 companies was a consequence of internal decisions. “The challenges faced by each company are different. We felt that we needed to raise base pay by that amount (35,000 yen) in order to overcome the challenges faced by our company.”
