Toyota Motor Corp has agreed to provide the biggest wage hike within two decades. This is in an early sign momentum within pay gains whilst the central bank searches for evidence of some wage-price cycle which can result in a policy change. It has been observed that the company accepted to increase pay encompassing base wages as well as bonuses particularly at the first round of negotiations. The deadline for getting to a conclusion to these negotiations was not till March. This is actually the third consecutive year that the world’s biggest automaker was able to meet union demands completely.
Toyota’s acceptance of demands encouraging other companies
Toyota, being one of Japan’s biggest employers, has been able to behave like a bellweather of the important spring labor talks. These are occurring at major companies.
Many are thought to end fast as the government looks at inflation-beating wage hikes that will reduce hardships on the consumers.
Koji Sato who is the automaker’s incoming president stated that the decision to agree to the union’s demands completely at the first round of talks were aimed to not only help the company but to aid the industry as a whole. They are hoped to result in frank discussions occurring between labor as well as management at every company.
It was seen that inside hours of Toyota’s announcement, the rival Honda Motor Co Ltd claimed that it has accepted the union demands for the 55 pay increase. When looking at the average monthly base salary increase of 12,500 yen at Honda, this is the largest jump since around 1990.
With inflation in the country running at about 45, Japan tends to be under more pressure to increase wages so that consumption can be revived. However due to the economy struggling, it was able to revert recession within the fourth quarter but actually grew much less than was thought. It has been claimed by analysts that pay increases will stay limited to huge firms, like Toyota.
Japan aiming to increase wages to help economy
Wages are becoming an important part of discussions in Japan. This is as the Bank of Japan stated that there should be stronger wage growth so that the trend in prices will be sustainable. The bank tends to have a 2 percent inflation target, but with main prices increasing at 4 percent within the economy, the bank is committed to the massive stimulus program till wages display larger gains.