Toyota Motor Corp. and other major Japanese conglomerates are accepting demands from unions for significant pay increases. Toyota is acting as a benchmark for wage trends at large Japanese companies.
Toyota said on the 13th that it has decided to fully accept the union’s demand for the largest wage increase in the past 25 years since 1999. Toyota’s labor union has been demanding a maximum monthly salary increase of 28,440 yen (about $210) and the largest bonus payment ever. In response, Bank of Japan Governor Kazuo Ueda said the increase is another evidence that Japan is getting closer to a virtuous cycle of wage and inflation. Until now, the Cabinet of Fumio Kishida has repeatedly demanded wage increases in excess of inflation from business leaders. Nissan has also agreed to raise its average monthly wage by 18,000 yen (about $125). This is the largest increase since 2005 when the current wage system was introduced. Honda raised 5.6 percent, higher than the union demand, the highest increase since 6.2 percent in 1990. Japan Steel also said it has set a basic salary increase of 35,000 yen (about $275) per month, higher than the union demand.
Experts predict that the Bank of Japan will end its negative interest rate system by next month, expecting that the wage increase this year will be greater than last year as a result of negotiations between companies and unions. Kyodo News said, “Wages are certain to rise more than 4% over last year,” adding, “The focus is on whether this trend will affect small and medium-sized companies to escape from long deflation (falling prices amid the economic downturn).”
SOPHIA KIM
US ASIA JOURNAL
