Inflation in Japan, last month, reportedly jumped to a 41-year high. With rising consumer prices, the country's Prime Minister Fumio Kishida has been urging companies to hike wages in a bid to increase consumer spending. Amid the calls by Kishida, positive news trickled down on Wednesday when the nation's biggest employer Toyota announced that the company will accept the demand by unions for the biggest base salary increase in 20 years along with a rise in bonuses.
Japan has an age-old tradition of over half a century, widely known as spring labour talks. Under this, the country's major corporate players hold annual negotiations with the labour unions in the month of February.
The talks, which are currently ongoing, involve deciding pay rises for the upcoming year. Toyota, a trailblazer in these talks, decision for wage hikes resonate with the demand by the Kishida-led government to provide some relief to the consumers.
Toyota's incoming president Koji Sato said that the move which was taken after the conclusion of the first round of talks with the unions not just for Toyota but "also for the industry as a whole, and in the hope that it will lead to frank discussions between labour and management at each company"
Toyota and the union federation representing 357,000 Toyota group workers said the base pay rise was the biggest in two decades, reported Reuters.
Soon after this news broke, the giant's rival Honda Motor Co Ltd also announced it had agreed to union demands for a 5% pay increase, the company's biggest hike since 1990. The development comes as Kishida at a lower house budget committee session on Wednesday said, "We will boost consumption and expand domestic demand by promoting efforts toward structural wage increases."
Honda and Toyota are the latest announcing pay rises as other businesses such as Fast Retailing Co Ltd and video game maker Nintendo Co Ltd earlier announced that they will boost annual pay for the employees, Wionews reports