Toyota accepts union demands for the biggest pay rise in two decades

Tokyo (Reuters) Toyota Motor Co., the world’s largest automaker, said on Wednesday it would accept the union’s request for the biggest base salary increase in 20 years and increased bonus payments, as Japan steps up calls for companies to increase wages.

As one of the largest employers in Japan, Toyota (TM) It has long served as a forerunner to the workers’ spring talks, which are in full swing at major corporations. It is expected to conclude several measures quickly as the government seeks to beat inflation Rising wages To reduce burdens on consumers.

Koji Sato, the automaker’s incoming president, said the decision to fully accept the union’s demands in the first round of talks was not only for Toyota, but “also for the industry as a whole, and in the hope that it will lead to frank discussions between labor and management at each company.”

Within hours of Toyota’s announcement, the contender Honda Motor (Hamad Medical Corporation) She said she agreed to union demands for a 5% wage increase. Honda’s average monthly base salary increase of 12,500 yen ($92.70) is the biggest jump since at least 1990.

Toyota and the union representing the 357,000 Toyota Group workers said the increase in basic wages was the largest in two decades, though they declined to provide the percentage of the increase.

With the rate of inflation rising about 4%The highest level in 40 years After decades of deflation, Japan is under more pressure than ever to raise wages to revive consumption.

But as the economy struggled, it avoided a recession in the fourth quarter but grew much less than expected, and analysts say wage increases will still be limited to large companies, such as Toyota.

They say small and medium-sized businesses, which employ most Japanese workers, will struggle to afford wage increases.

Successful talks

Toyota said the wage increase will also apply to part-time workers and senior contract workers. It agreed to the union’s request for a one-time bonus payment of 6.7 months’ wages.

Takaaki Sakagami, deputy general secretary of the All Toyota Federation of Trade Unions, said the union was pleased to have been able to reach an agreement with the company so quickly.

The wage agreement comes as Prime Minister Fumio Kishida stepped up calls for business leaders to speed up wage increases, warning of a return to stagflation if wage increases fall short of rapid price increases.

“We will boost consumption and expand domestic demand by strengthening efforts toward structural wage increases,” Kishida told the House Budget Committee session on Wednesday.

Retail Express (frcof)which owns clothing giant Uniqlo, said last month it would wage increase by as much as 40%, fueling expectations that major manufacturers will offer more in annual wage talks with unions this spring.

Video game maker Nintendo (NTDOF) It said earlier this month that it plans to raise basic wages for workers by 10%, despite scaling back its full-year earnings forecast.