Thu, Mar 19, 2015 - Page 15 News List

Japanese firms heed call to raise pay

DRIVING LEADERSHIP:Toyota and Nissan, the country’s largest and second-largest automakers respectively, have agreed to raise their employees’ average base wages

AFP, TOKYO

Major firms yesterday announced pay increases for workers after sustained pressure from the government in its bid to push up prices in deflationary Japan.

Japanese Prime Minister Shinzo Abe’s drive to get Japan economically ship-shape with a mix of easy money and fiscal largesse has born some fruit since its launch two years ago in the form of soaring stock prices and a falling currency.

However, stagnant salaries have been one of the main missing links in the “virtuous circle” of growth that the premier’s signature “Abenomics” plan envisages.

With deals from some of Japan’s biggest employers announced yesterday following the annual labor talks — known as shunto, or the “spring offensive” — it appeared the prime minister is at least partially getting his way.

The world’s biggest automaker, Toyota Motor Corp, said it would raise employees’ pay by an average of ¥4,000 (US$33) per month.

Toyota employees would also get an average bonus worth 6.8 months of their base wage — a common pay structure in Japan, the company said.

Last year, the company gave its first wage hike in six years.

Japan’s No. 2 automaker, Nissan Motor Co, agreed to give an even bigger raise of ¥5,000 per month, and a bonus worth 5.7 months of employees’ base wage, the company said.

“We have had thorough discussions on the very difficult challenge of becoming more competitive ... while contributing to sustaining a good economic cycle,” Toyota managing officer Tatsuro Ueda told reporters.

Major electronics firms, such as Panasonic Corp and Toshiba Corp, agreed to give a unified wage hike of ¥3,000 per month, bigger than last year’s ¥2,000.

Pay increases have taken on an extra significance since a precipitous sales tax hike in April last year dented the economy’s frail recovery.

The sales tax rise — Japan’s first in 17 years — slammed the brakes on consumer spending, plunging the economy into recession and throwing Abe’s growth-boosting program into question.

The plunge in the value of the yen, while helping exporters, reduced spending power at home because it made imports more expensive.

Official data have shown that Japanese household spending last year declined at its fastest pace in eight years, underscoring how badly clobbered the average Japanese felt.

Meanwhile, Japan’s trade deficit nearly halved year-on-year last month, as lower oil prices helped reduce the cost of imports, official data showed yesterday.

The monthly deficit came in at ¥424.6 billion, down 47.3 percent from a year ago, as exports in the month rose 2.4 percent to ¥5.94 trillion, while imports fell 3.6 percent to ¥6.36 trillion, it said.

SMBC Nikko Securities said that Japan’s overall exports would expand further mainly thanks to strong demand in the US market.

“The trade balance may swing back into the black as early as March and [Japan] will then expand its trade surplus,” the securities firm said in a note.

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