Toyota and Honda announce biggest pay hikes in decades

New Delhi, . Japanese motor industry giants Toyota and Honda have said they have agreed to give their employees the biggest pay hike in decades. They are the latest firms to raise wages as prices soar in the world’s third-largest economy, the BBC reported. The report said that, official data published last month showed that Japan’s inflation rate was at its highest level in 40 years. This has put pressure on businesses and authorities to help people, with their spending power reduced.

Every year, Japanese companies usually hold wage negotiations with unions before announcing their decisions around mid-March. Carmakers haven’t explained why this year’s announcements were made earlier.

Toyota said on Wednesday it would meet the union’s demands for pay and bonuses, the biggest wage increase in 20 years, the BBC reported. Incoming Toyota chairman Koji Sato said he hoped the move would have a positive impact on Japan’s motor industry and open discussions between labor and management at each company.

Meanwhile, rival carmaker Honda told the BBC it had fully responded to the union’s requests for pay rises and bonuses. The BBC reported that the company said it would increase wages by 5 percent, marking the biggest increase since 1990 and above Japan’s inflation rate.

A Honda spokesperson said the extra money will be distributed largely to younger employees as starting salaries are raised. The spokesperson said, despite the bad business environment, the management has a strong desire to create an environment in which all employees can pursue their work with enthusiasm. Earlier this year, Japan’s Prime Minister Fumio Kishida called on firms to raise wages to help those struggling with rising prices.

For decades, both prices and wage growth have remained stagnant in Japan. The BBC reported that in recent months, inflation rose around the world as countries eased pandemic-related restrictions and the war in Ukraine pushed up energy prices.

–IANS

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