Tokyo
Reuters
—
Toyota Motor, the world’s largest automaker, said Wednesday it will accept the union’s demand for the biggest increase in base wages in 20 years and higher bonus payments as Japan urges businesses to raise wages.
As one of Japan’s largest employers, Toyota
(TM) has long served as a guide to spring labor negotiations, which are in full swing in large companies. Many are expected to shut down quickly as the government seeks to beat inflation. salary increase ease the burden on consumers.
The automaker’s new president, Koji Sato, said the decision to fully accept the union’s demands in the first round of negotiations was not only for Toyota, but for the industry as a whole, and in the hope that it would lead to frank discussions between labor. and management within each company.
Hours after Toyota’s announcement, rival Honda
(GMK) Motor said it agreed to the union’s demands for a 5% pay increase. The average monthly base wage rose by 12,500 yen ($92.70) at Honda.
(GMK) This is the biggest jump since at least 1990.
Toyota and a federation of labor unions representing 357,000 Toyota Group workers said the base wage increase was the largest in two decades, although both declined to grant a percentage increase.
With inflation, about 4%the highest level in 40 years after decades of deflation, Japan is under more pressure than ever before to raise wages to revive consumption.
But due to problems in the economy, it averted a recession in the fourth quarter, but grew much less than expected, analysts say, wage increases will remain limited to large firms such as Toyota.
Small and medium-sized companies, which employ the majority of Japanese workers, will find it difficult to afford a pay increase, they said.
Toyota said its pay increase would also affect part-time workers and senior contractors. He agreed to the union’s request for a one-time bonus payment of 6.7 months’ wages.
Takaaki Sakagami, deputy general secretary of the Toyota All Workers’ Federation of Trade Unions, said the union is pleased that it was able to close a deal with the company quickly.
The pay agreement was struck after Prime Minister Fumio Kishida stepped up calls for business leaders to speed up wage increases, warning of a return to stagflation if wage increases do not match rapidly rising prices.
“We will stimulate consumption and expand domestic demand by advancing structural wage increases,” Kishida said at a meeting of the lower house budget committee on Wednesday.
Fast Retail
(FRKOF)which owns clothing giant Uniqlo, said last month that raise pay up to 40%, fueling expectations that the big producers will offer more at the annual union talks this spring.
Video game manufacturer Nintendo
(NTDOF) said earlier this month that it plans to raise workers’ base wages by 10% despite lowering full-year earnings guidance.