Toyota, one of Japan’s biggest employers, gave in to demands for higher pay this week, giving union workers their biggest pay hike in two decades.
The company accepted the union’s demands in the first rounds of negotiations. The incoming president of Toyota automakers Koji Sato said he hopes it sends a signal to others in the automotive industry.
According to the company, the wage increases would apply to part-time and senior workers and includes a one-time bonus payment worth 6.7 months’ worth of wages.
Other Japanese auto companies followed shortly after. Honda, for example, announced just hours later that they had agreed to a 5% increase in base pay, making it Honda’s biggest salary increase in over 30 years.
The pay hikes come amid record inflation in Japan. While the country avoided a recession last year, growth slowed significantly. As a result, Prime Minister Fumio Kishida has called on businesses to increase pay to stimulate consumer spending amid raising prices.
Inflation in Japan currently sits at 4%, a 40-year high.
Companies outside of the auto industry have heeded the PM’s call as well.
Video game giant Nintendo recently announced it would be increasing its workers’ base pay by 10% and retail clothing company Fast Retailing, owner of Uniqlo, announced last month that they would be boosting pay by upwards of 40%.
Toyota and the union federation that represents over 350,000 workers declined to provide the exact percentage of the increase in pay.
• Vaughn Cockayne can be reached at vcockayne@washingtontimes.com.
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