- Honda and Toyota have agreed to give their employees in the country the biggest wage raises.
- Japan’s inflation rate was at its highest in nearly 40 years.
- Japanese companies undergo weeks of compensation negotiations with unions every year.
Toyota and Honda, two Japanese automakers, have agreed to give their employees in the country the biggest wage raises in decades.
They are the most recent companies in the world’s third-largest economy to raise pay while prices rise.
Japan’s inflation rate was at its highest in nearly 40 years, according to official numbers released last month.
This has put pressure on businesses and governments to assist individuals as their purchasing power has shrunk.
Every year, Japanese companies undergo weeks of compensation negotiations with unions before announcing their decisions around the middle of March.
The automobile manufacturers have not stated why this year’s statements were issued sooner than usual.
Toyota announced on Wednesday that it will meet union demands for compensation and incentives, with earnings increasing by the greatest in 20 years.
Toyota’s incoming president, Koji Sato, expressed hope that the move will have a positive impact on the Japanese automotive industry and “lead to frank discussions between labor and management at each company.”
‘Completely responded’
Nevertheless, Honda said that it has “completely responded” to union requests for salary rises and bonuses.
The corporation announced a 5% pay boost, the largest since 1990 and higher than Japan’s inflation rate.
According to a Honda representative, the additional funds will be handed primarily to younger staff as starting salaries are increased.
“Despite the severe business environment, management has a strong desire to create an environment in which all employees can… push forward with their work with a sense of urgency,” the spokesperson added.
Earlier this year, Japan’s Prime Minister Fumio Kishida called on businesses to raise pay in order to assist consumers dealing with rising expenses.
Fast Retailing, the parent company of Uniqlo, announced in January that it will increase employee pay in its native nation by up to 40%.
From the beginning of March, the new pay policy will apply to full-time employees at the business’s headquarters and company stores in Japan, according to the company.
In Japan, both price and wage growth have been stagnating for decades.
In recent months, global inflation has risen as governments relax pandemic restrictions and the Ukrainian conflict drives up oil prices.
In December, Japan’s core consumer prices rose by 4% from a year earlier, double the central bank’s target level and the highest rate in 41 years.
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