Although the Japanese Trade Union Confederation (Rengo) has presented a basic stance toward the next spring wage negotiations – namely, demanding a base pay increase of about 2 percent – it is uncertain how rises in the underlying trend in inflation and the outlook for prices will be reflected in base pay.
This requires the necessary structural reforms to be carried out in order to increase labour force participation rates and boost productivity. There are still at least 20 million unemployed people in the euro area – many of whom are young – who need to be brought back into the labour market. This represents enormous potential.