- By Annabelle Liang
- business reporter
9 minutes ago
Japanese auto giants Toyota and Honda have agreed to give their workers in the country the biggest wage increases in decades.
They are the latest companies in the world’s third largest economy to raise wages as prices rise.
Official figures released last month showed that Japan’s inflation rate was at its highest level in over 40 years.
This has put pressure on businesses and government agencies to help people when their purchasing power is shrinking.
Typically, Japanese companies spend weeks each year in wage negotiations with the unions before announcing their decisions in mid-March.
The automakers haven’t said why this year’s announcements were made earlier than usual.
On Wednesday, Toyota said it would meet union demands for pay and bonuses, with wages rising by the highest in 20 years.
Toyota’s incoming president, Koji Sato, said he hoped the move would have a positive impact on the Japanese auto industry and “lead to open discussions between workers and management at each company.”
The company declined to give further details when approached by the `.
Meanwhile, rival automaker Honda told the ` it had “completely answered” union demands for pay rises and bonuses.
The company said it will increase base salaries by the most in three decades.
A Honda spokesman said most of the extra money will be distributed to younger employees as starting salaries are increased.
“Despite the difficult business environment, management has a strong desire to create an environment where all employees … can advance their jobs with a sense of urgency,” the spokesperson added.
Earlier this year, Japan’s Prime Minister Fumio Kishida urged companies to increase wages to help people struggling with soaring prices.
The company said the new salary policy would apply to full-time employees at the company’s headquarters and branches in Japan from early March.
For decades both prices and wage growth stagnated in Japan.
Inflation has skyrocketed around the world in recent months as countries eased pandemic restrictions and the war in Ukraine pushed up energy prices.
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