In its editorial on Mar 17, the paper argues that pay hikes are important for growth.

To realise a virtuous economic cycle led by domestic demand, it is important to further spread, and sustain, the trend for pay hikes.

Automakers, electronics makers and other leading companies, which set the tone in shunto spring wage negotiations, have decided to implement pay scale hikes that will raise the base pay levels for regular workers for the third year in a row.

Among automakers, whose labour unions called for a monthly pay scale hike of 3,000 y en (S$36), the management of Nissan Motor Co. agreed to fully meet the demand.

Toyota Motor Corp. offered the labour side a pay scale hike of 1,500 yen.

The management of leading electronics makers, including Hitachi, made a unified offer of a monthly base pay increase of 1,500 yen in response to labour union demands of 3,000 yen.

The offers made this year fall short of last year's biggest pay scale hikes, and also lack the strength to boost consumption. But it is significant that pay scale hikes, which have a great impact on household finances, have been maintained.

This year's shunto has also been characterised by management offering hourly wage hikes and improving employment conditions for non-regular workers, who account for nearly 40 per cent of the total workforce.

Mindsets are changing among officials of the Japanese Trade Union Confederation (Rengo) and major labour unions regarding the need to also pay attention to non-regular workers.

Toyota has decided to raise the daily wage of fixed-term workers at its plants by 150 yen.

The scale of that wage hike, which equates to a 3,000 yen increase for people working 20 days a month, exceeds the monthly base pay increase it offered to regular workers.

Nitori Co., a leading furniture manufacturer and retailer, has decided to raise the hourly wages of its part-time and non-regular workers by an average of 28.7 yen.

Aeon Co., a leading general merchandise store operator, is studying the possibility of raising the hourly wage of its nonregular workers, who total about 70,000.

Improving employment conditions for non-regular workers has become a visible trend across a broader range of industries.

In light of criticism about the wage disparity between regular and non-regular workers, Rengo considers this year's wage negotiations to be a "jacking-up shunto".

Management is pressed by the need to improve wages and secure enough manpower amid an increasingly critical labour shortage.

It is essential to prevent the wage hike momentum from stopping.

Efforts are also needed to increase opportunities for excellent and highly motivated non-regular workers to be promoted to regular workers.

The important thing is for the pay hike trend among leading companies to spread among small and mid-sized firms, for which spring wage talks will get into full swing in the days ahead.

Big companies enjoying brisk performances should refrain from making demands to sub-contractors, such as excessive cost cuts.

To increase private consumption and ensure a departure from the deflationary trend, it is vital to create an environment in which workers have good prospects that their wages will keep rising in the future.

Concerns about the global economic outlook, such as a slump in China and other newly emerging countries, have led major companies to moderate the scope of their pay scale hikes.

However, the profit levels of these companies are sufficiently high.

Management should continue investing in manpower - the driving force for growth.

The government must expedite efforts to reinforce its growth strategy by taking deregulation measures and other steps that would help companies enhance productivity and help them venture into new enterprises.

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The Yomiuri Shimbun is a member of The Straits Times' media partner Asia News Network, an alliance of 22 newspapers.