Toyota Motor Corp. has agreed to hike base wages in Japan it heads for record profits this fiscal year. According to Senior Managing Officer Naoki Miyazaki, the average Toyota Motor Workers’ Union member will earn JPY2,700 ($26) more in monthly base pay, representing an 0.8-percent rise over the average salary in 2013.
However, it is still below the JPY4,000 the union was asking for. The increase comes as Japanese companies are bracing for a sales tax increase that will take effect next month. Japanese Prime Minister Shinzo Abe has been pushing companies to increase workers’ pay to help end a decade-and-a-half of deflation.
“If the Japanese economy was more likely to continue to grow for another 12 months, we would see much more robust growth in wages,” Takuji Okubo, chief economist at Japan Macro Advisors told Bloomberg in a phone interview. Toyota said its employees will receive a 2.9-percent increase on average when the JPY7,300 average hike in pay that they receive based on seniority or promotions is included.
Toyota has granted a request from Toyota’s union -- representing over 50,000 workers -- for the average bonus to be increased to JPY2.44 million, which is equivalent to 6.8 months of salary and the most in six years.
Toyota is not the only carmaker hiking wages. For instance, Nissan Motor Co. has agreed to its union’s request to increase base wages by JPY3,500 and bonuses equivalent to 5.6 months of salary, spokesman Chris Keeffe told Bloomberg by phone. Honda Motor Co. also agreed to raise monthly base wages by JPY2,200. [source: Bloomberg]