Many major Japanese companies, including Toyota Motor Corp, on Wednesday fully met the wage hike demands of their labor unions, which have been calling for substantial raises to address surging prices amid chronic labor shortages.
The government has been paying attention to the annual wage negotiations between management and labor unions to see if the strong push for salary gains will be sustained and extend to small and medium-sized companies, which employ around 70 percent of the country's workforce.
Seen as a trendsetter in wage negotiations, Toyota, the world's largest carmaker by volume, fully met its union's request on a total resource basis. The firm's union demanded wage hikes of up to 24,450 yen per month, depending on the worker.
Wage hikes remained subdued in Japan for decades following the burst of the asset-inflated bubble economy in the early 1990s and ensuing deflation.
But due in part to inflation caused by Russia's invasion of Ukraine, the "shunto" spring wage talks in 2023 saw the highest pay increase in 30 years.
Nevertheless, the pace of pay growth has yet to keep up with persistent inflation, with real wages falling year-on-year for the third consecutive year in 2024.
Market players are also closely monitoring the wage talks, with expectations of robust rises fueling growing speculation that the Bank of Japan will further raise interest rates.
Mitsubishi Chemical Holdings Corp offered more than demanded, with a base pay hike of around 18,000 yen.
Among electronics makers, Hitachi Ltd and NEC Corp each proposed a monthly base wage increase of 17,000 yen, as sought by their unions.
Major heavy machinery manufacturers Mitsubishi Heavy Industries Ltd, Kawasaki Heavy Industries Ltd and IHI Corp followed suit in matching their unions' demands.
Bucking the upbeat trend, struggling automaker Nissan Motor Co proposed an average wage hike of 16,500 yen, lower than the 18,000 yen sought by its union. Honda Motor Co also failed to meet its union's demand.
The strong results reflected Japan's severe labor crunch, which prompted companies to raise salaries to retain workers and attract talent.
The annual wage talks at major companies typically begin in mid-February and conclude by mid-March. But this year, several firms, including auto parts makers Denso Corp and Aisin Corp, had already fully met their labor unions' requests before Wednesday.
A preliminary tally by the Japanese Trade Union Confederation, the country's biggest labor union umbrella organization, known as Rengo, as of March 3 showed that its member unions had demanded an average pay rise of 6.09 percent, exceeding 6 percent for the first time since 1993.
Many major firms have the resources to boost wages, supported by anticipated strong earnings for the current fiscal year through March.
The combined net profit of major companies is expected to reach 52.65 trillion yen for fiscal 2024, marking a record for the fourth straight year, according to data from SMBC Nikko Securities Inc.
© KYODO
23 Comments
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Namahage
Waiting with bated breath.
Meanwhile,most people just working the bare minimum when wages are minimal.
We are not idiots.
Hawk
Great for workers at those relatively few companies. The rest of us however...we'll see but I won't hold my breath.
SDCA
Is there a specific reason this had to be handwritten on a whiteboard instead of simply projecting it from a laptop, especially since the Excel sheet the lady is carrying was likely printed from there?
Good news for those employed by major firms! I just might join a union.
Sh1mon M4sada
This is a good start. This is Japan's spearhead into productivity gains and to sustain it, workers must be brought along.
Just don't over do it and create another bubble.
Hawk
I'm in a union, albeit not a major one. Completely ineffective in terms of wage hikes so far.
WoodyLee
""With the move by big firms, attention is shifting to whether the strong push for salary gains, beginning two years ago, will extend to small and medium-sized companies, which employ around 70 percent of the country's workforce.""
NO IT HASN"T happened yet and I doubt if it will unless there are incentives, small and medium sized companies are not as PRIVELAGED as lets say Toyota and others like it, they are being squeezed by the large companies like let say Toyota and others like it,
it like pushing or shifting an air bubble in a balloon.
Major companies are paying more to keep employees while squeezing subcontractors who have very little to offer their workers, and so they go out of business or the big fish swallows their business.
WoodyLee
Soon major companies will be paying salaries equal may be higher than the central government then watch employees switch jobs, LOL
HopeSpringsEternal
Inflation's out of control, as Japanese Govt. Covid price supports being pulled on food, energy etc., so market pricing taking effect like an Inflation ROCKET Ship!
SDCA
darn... thanks for the input!
Hawk
SDCA,
Full disclosure, I'm on yearly contracts which probably doesn't help. I'm planning on asking for an increase to my base pay directly if the 'fingers crossed' approach doesn't go.
Speed
It's great to work for one of these major companies. 70% of the nation though is small and medium sized companies so THEY are what the government really should be looking at.
I was looking at lots of different job ads online and ALL of them were 1,000 yen per hour or just above or below that. It didn'tt matter if it was for a driver, delivery person, hotel desk clerk, store clerk or a shelf stocker.
That's very hard to survive on and basically minimum wage.
DeeZee
Japanese firms should be forced to raise them at similar levels to other industrialised nations. If they can't afford to raise them then they shouldn't be in business.
HopeSpringsEternal
Hard cold reality? Can't depend upon others for long to pay you 'fairly'. Nature of capitalism, so if you want to be paid 'fairly', you have to figure out how to pay YOURSELF
ScottDRad
An extra 24,000 yen per month for the top company in Japan, 17,000 for NEC. The smaller companies will pay less, hard if not impossile to be a worker in Japan.
wanderlust
Rises wiped out instantly by increased prices of 3,400 items this month!
SDCA
Hope you're able to get what you deserve. Best of luck!
HopeSpringsEternal
Consider Yen since mid 2020 has lost 5X it's real asset purchasing power against diversified commodities index CRB (41% Foods, 39% Energies, 20% Metals)
Above my friends = SOURCE of Inflation!
Why? Endless BOJ Central Bank Money printing and a Global Proxy War, together destroying value of ALL Currencies - US$ lost +3X above purchasing power
No surprise Unions (&everyone else!) wants Pay Raises!
HopeSpringsEternal
She didn't believe in the future for her or her child as global inflation's the cancer plaguing societies now, destroying hope and confidence that things will be ok.
We spend all this money on VERY old folks for pointless medical care in many cases and can't even help out single Moms in DIRE $need$, what the heck is going on?
HopeSpringsEternal
Sorry, above WRONG JT article!
factchecker
" Is there a specific reason this had to be handwritten on a whiteboard instead of simply projecting it from a laptop, especially since the Excel sheet the lady is carrying was likely printed from there? "
You should be congratulating them for moving away from chalk and a blackboard!
ClippetyClop
Maybe calm DOWN and $top global proxy AI repetitive $pamming of every article that you are uninformed about.
Cephus
Excellent!!
syniksan
Relax, the down vote button is working just fine.