Toyota agrees to union demands for biggest wage hike in two decades

Tokyo (Reuters) Toyota Motor, the world’s biggest automaker, said on Wednesday it would accept a union demand for the largest base salary increase in 20 years and increase in bonus payments, as Japanese businesses stepped up calls to raise wages.

As one of Japan’s largest employers, Toyota (T.M) He has long served as a bellwether for the spring labor talks in full swing at major corporations. Many are expected to close quickly as the government tries to curb inflation Salary increase To reduce burden on consumers.

The decision to fully accept the union’s demands in the first round of talks is not just for Toyota, but “for the industry as a whole, and we hope it will lead to open discussions,” said Koji Sato, the automaker’s incoming president. Labor and Management in Every Organization”.

Within hours of Toyota’s announcement, rival Honda Motor (HMC) He said he agreed to union demands for a 5% wage hike. The 12,500 yen ($92.70) increase in the average monthly base salary at Honda is the biggest since at least 1990.

Toyota and the confederation of unions representing 357,000 Toyota Group workers said the base pay hike was the biggest in two decades, though they both declined to give a percentage increase.

Inflation is running 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 with a struggling economy that avoided recession in the fourth quarter but grew much less than expected, analysts say wage increases will be limited to big companies like Toyota.

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They say small and medium-sized companies, which employ the majority of Japanese workers, will struggle to pass on wage increases.

Successful speeches

Toyota said its pay hike will also apply to part-time workers and senior contract workers. It agreed to the union’s demand for one-time bonus payments worth 6.7 months’ wages.

Takagi Sakagami, deputy secretary general of the All Toyota Workers’ Union, said the union was pleased to be able to reach an agreement with the company so quickly.

The wage deal comes as Prime Minister Fumio Kishida has called on business leaders to accelerate wage increases, warning of a return to stagnation if wage increases fall short of inflation.

“We will boost consumption and expand domestic demand by encouraging efforts at constructive wage increases,” Kishida said at a low-budget committee meeting on Wednesday.

Fast Retailing (FRCOF)It will own clothing giant Uniqlo, it said last month Salary increase By up to 40%, major manufacturers are expected to make more concessions in annual wage talks with unions this spring.

Video game producer Nintendo (NTDOF) Earlier this month, it said it planned to raise workers’ base pay by 10%, despite lowering its full-year profit forecast.

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