Monitoring Desk
ISLAMABAD/TOKYO: Japanese motor industry giants Honda and Toyota have said they have agreed to give their workers in the country the biggest pay increase in decades.They are the latest firms in the international third largest economy to raise wages as the prices jump.Official figures published the previous month showed Japan’s rate of inflation was at its highest level in over forty years.
That puts pressure on authorities and businesses to help people as their spending power shrinks. Each year Japanese firms hold pay talks with unions for weeks before announcing their decisions around the middle of March. The vehicle makers have not said why this year’s announcements were made earlier than usual. On Wednesday, Toyota said that it would meet union demands for pay and bonuses, with wages rising by the most in twenty years.
Toyota’s incoming president Koji Sato said he hoped a move would have a positive impact across Japan’s motor industry and “lead to frank discussions between management and labour at each company.” A company declined to provide further information when approached by the BBC.
Rival vehicle maker Honda told the BBC that it had “fully answered” union requests for wage raising and bonuses. The company said it would raise base salaries by the most in three decades.
Honda spokesperson said that the extra money would largely be distributed to younger workers as starting salaries are boosted. The spokesperson said that “Despite the severe business environment, management has a strong desire to create an environment in which all workers can push forward with their work with a sense of urgency,”.
Earlier that year, Japan’s prime minister Fumio Kishida called on firms to increase wages to help people struggling with increased prices.
Pay increase by fashion chain
In January, the owner of the fashion chain Uniqlo, Fast Retailing, said it would increase the pay of the employee in its home country by up to 40 percent. The company said that the fresh pay policy would apply to full-time employees at its headquarters and the company stores in Japan from the beginning of March.
For decades both prices and wage growth in Japan had been stagnant. In recent months inflation around the globe jumped as nations eased pandemic banned and Ukraine/Russia war pushed up energy prices.
In December, Japan’s core consumer prices increased by 4 percent from a year earlier, double the central bank’s target level and the highest rate in 41 years.
