It was reported in January that Japan’s inflation reportedly jumped to a 41-year high. With increasing consumer prices, the country’s Prime Minister Fumio Kishida has been requesting companies to raise wages in order to increase consumer spending. In between all chaos, positive news exuded on Wednesday when the nation’s biggest employer and automaker Toyota announced that the company will oblige to the demand made by unions for the biggest base salary increase in 20 years along with a raise in bonuses.
Of over half a century, Japan has an age-old tradition popularly known as spring labour talks in which, the country’s prominent corporate players carry out annual negotiations with the labour unions in the month of February.
The spring labour talks, which are currently being held, is for deciding pay rises for the upcoming year. Toyota, a pioneer in these talks, decided for wage hikes correspond with the demand by the Kishida-led government to provide some relief to the consumers.
Toyota’s president Koji Sato said that the move which was taken after the first round of talks with the unions concluded, not only for Toyota but “also for the industry as a whole, and in the hope that it will lead to frank discussions between labour and management at each company.”
Toyota said its wage hike would also apply to part-time workers and senior contract workers and it had agreed to union’s request for one-off bonus payments that value at 6.7 months of wages.
Deputy secretary-general of the Federation of All Toyota Workers’ Union, Takaaki Sakagami, said the union was happy it had been able to reach a deal with the company quickly.
Toyota and the union federation representing 357,000 Toyota group workers said the base pay rise was the biggest in two decades, reported Reuters.
Shortly after this news reached public, the giant’s rival automaker Honda Motor Co Ltd also announced that it had conformed to union demands for a 5 per cent pay raise, which will be the company’s biggest wage hike since 1990. The move comes as Prime Minister Kishida at a lower house budget committee session on Wednesday said, “We will boost consumption and expand domestic demand by promoting efforts toward structural wage increases.”
Honda and Toyota are the latest to announce pay rises as other businesses such as Fast Retailing Co Ltd and video game maker Nintendo Co Ltd previously announced that they will boost annual pay for the employees.
