Toyota gives workers largest wage increase in two decades




TOKYO, Japan: As the Japanese government has stepped up calls for businesses to increase workers’ pay, this week Toyota, the world’s largest automaker, said it plans to accept a union demand for the highest base salary increase in 20 years, and raise bonuses.

As one of Japan’s largest employers, Toyota’s incoming president, Koji Sato, said the decision to fully accept the union’s demands after the first round of talks was not just for the company, but "also for the industry as a whole."

Rival Honda also said it had agreed to union demands for a 5 percent pay increase, hours after Toyota’s announcement.

However, Toyota and the union federation representing 357,000 Toyota group workers have declined to provide the percentage increase.

Japanese companies are under more pressure to raise wages to revive consumption, as inflation in the country is running at some 4 percent, the highest level in 40 years, after decades of deflation.

Toyota said that part-time workers and senior contract workers will also see their wages rise, adding that it had agreed to the union’s request for one-off bonus payments worth 6.7 months of wages.

Takaaki Sakagami, deputy secretary-general of the Federation of All Toyota Workers’ Union, said the union was pleased to quickly reach a deal with the company.

The pay agreement comes as Prime Minister Fumio Kishida further called on business leaders to accelerate wage increases, warning that if pay raises do not keep pace with price rises, stagflation will return.

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