Toyota Motor Corp agreed to increase base wages in Japan for the first time since 2008 as the nation’s largest company heads for record profits.
The average Toyota Motor Workers’ Union member will earn ￥2,700 (US$26) more in base pay per month, senior managing officer Naoki Miyazaki told reporters yesterday.
That is 0.8 percent of last year’s average salary and below the ￥4,000 the union was asking for.
When including the ￥7,300 average increase in pay that workers receive based on seniority or promotions, Toyota said its workers will get a 2.9 percent raise on average.
While a weaker yen has helped Toyota forecast a record ￥1.9 trillion profit for the year ending March 31, the raise comes as Japanese companies brace for next month’s sales-tax increase, the first in 17 years.
Japanese Prime Minister Shinzo Abe has been pressing employers to increase pay for workers to help end more than 15 years of deflation.
Toyota’s union, which represents more than 50,000 workers for the world’s largest automaker, was granted its request for the average bonus to rise to ￥2.44 million, the equivalent of 6.8 months of salary and the most in six years.
Other carmakers raised wages too. Nissan Motor Co has agreed to its union’s request for a ￥3,500 increase in base wages and bonuses equivalent to 5.6 months of salary, spokesman Chris Keeffe said by telephone.
Honda Motor Co agreed to raise monthly base wages by ￥2,200. Kyodo reported on Tuesday that Suzuki Motor Corp would not raise base salaries in Japan.
About 1,000 auto-industry unions requested increases in base salaries for the upcoming year, the most since 2008, according to the Japan Confederation of Automobile Workers’ Unions.
The average salary raise sought, excluding bonuses, was about 1.3 percent, or ￥3,048 a month.
Beyond cars, companies from Nippon Steel & Sumitomo Metal Corp to retailer Lawson Inc and Daiwa Securities Group Inc have announced this month they will be raising base wages too.
Abe, whose success in lowering the value of the yen has boosted earnings from exports and overseas sales, needs sustained wage gains to help households cope with higher taxes and policies aimed at stoking inflation.
“Deflation should be eliminated from Japan as quickly as possible,” Miyazaki said. “Toyota and the union will make a contribution. We have a role to play.”
Still, concerns that taxes and prices will rise faster than wages contributed to an indicator of economic hardship climb to a 33-year high.
The misery index, which adds the jobless rate to the level of inflation, will climb to 7 percentage points next quarter, based on the median estimate of economists surveyed by Bloomberg News.
That would be the highest level for the measure since 1981, when Japan was emerging out of depression after the oil shocks in the 1970s.
Base pay excluding bonuses and overtime rose 0.1 percent in January, the first increase from a year earlier in 22 months, Japan’s Ministry of Health, Labor and Welfare said on Tuesday last week.
However, overall pay fell 0.2 percent, the first drop in three months.