Large firms kicked off their annual wage talks Wednesday, with labor unions demanding a pay-scale hike amid Prime Minister Shinzo Abe’s repeated calls for an increase in salaries that would help boost consumption and shore up the economy.
Workers at major automakers including Toyota Motor Corp., which has posted record profits, submitted a formal request for a pay-scale rise of ¥6,000 per month.
The figure compares with last year’s request of ¥4,000 for Toyota and ¥3,500 for Nissan Motor Co. and Honda Motor Co.
The “shunto” spring offensive wage negotiations across industries will last through mid-March.
The labor unions of Toyota also asked for a bonus worth 6.8 times the amount of monthly pay.
Besides carmakers, electronics manufacturers such as Panasonic Corp. will also consider requests for wage increases, reflecting their robust earnings partly helped by the weakening yen, which has pumped up the value of their overseas sales in yen terms.
At smaller companies, though, the falling yen has added to their woes in the form of higher raw material and other import costs, and it is uncertain whether pay raises will be spread out across the economy.
Management at larger firms are also concerned that pay-scale hikes could increase fixed costs for companies, with many apparently preferring to increase bonuses or other lump sum payments.
To beat chronic deflation, Abe has called on the nation’s business leaders to raise salaries again after many major companies did so last year, while the administration takes steps beneficial to businesses, such as cutting the corporate tax.
The economy emerged from recession, growing an annualized 2.2 percent in the three months to December. But the expansion was weaker than market forecasts, with a fragile recovery affected by persistently weak consumer sentiment following the consumption tax hike last April.
The development could also help the Bank of Japan achieve its goal of lifting the inflation rate to 2 percent in the next fiscal year despite falling oil prices and a slowdown in household spending.