(Source from Reuters/Alamy)
The decision came as the Japanese government demanded a wage increase equivalent to the inflation rate of its companies, and attention is being paid to whether Toyota, Japan’s top sales company, will affect other companies.According to Japan’s Asahi Shimbun on the 22nd, Toyota said it fully accepts the union’s demand for wage hikes and performance- The union did not disclose the rate of increase, but said it was the highest increase in 20 years. Toyota’s labor and management also agreed to pay bonuses equivalent to wages for six to seven months.
Toyota remained the world’s No. 1 in sales of new cars with 10.48 million units last year, but it fell 12,500 units compared to 2021 due to rising raw material prices and semiconductor supply shortages. In the U.S. market, it lost its No. 1 position to General Motors (GM). Nevertheless, the union accepted the demand for higher wages because of the unusual inflation rate.
Japan’s Consumer Price Index (CPI) rose 4.0 percent in December last year from the same period last year, the highest in 41 years. Electricity and gas prices rose 20 percent from a year ago, and processed food prices soared by the largest margin since 1976.
As real wages declined due to rising prices, the Japanese government began to pressure companies. Japanese Prime Minister Fumio Kishida said at a New Year’s press conference on the 4th of last month, “We will somehow raise wages to create a foundation for sustainable and strong growth,” calling on companies to cooperate to raise wages in excess of inflation.
As a result, companies are carrying out drastic wage increases one after another. Last month, Fast Retailing, the headquarters of Japanese clothing brand Uniqlo, announced that it would raise the annual salary of 8,400 employees working in Japan by up to 40 percent starting next month to prevent the outflow of talent. Nintendo, a video game company, said it would raise its employees’ salaries by 10% even though it lowered its annual profit forecast for this year. Electronics manufacturer Canon also announced that it would raise the basic salary of 25,000 employees by 7,000 yen for the first time in 20 years.
(Source from Reuters/Alamy)
The labor shortage is also a factor in raising wages. Japan, where the low birth rate and aging population have been progressing for a long time, has more companies that need employees than job seekers. The labor shortage is becoming serious as even foreign workers leave Japan due to the weak yen. Nomura Research Institute predicts that 10.47 million workers will be short by 2030.
Toyota’s decision is expected to affect other labor-management negotiations. Toyota’s labor union, which has about 357,000 employees, is one of Japan’s largest unions and plays an important role in the spring labor-management negotiations, which begin in February every year.
The Asahi Shimbun said, “Toyota, the nation’s largest company, is expected to have a ripple effect inside and outside the industry as it takes the lead in deciding to raise wages.” However, Reuters predicted, “As growth has slowed, wage hikes will be limited to large companies rather than small and medium-sized companies that are difficult to handle.”
TED PARK
ASIA JOURNAL
