In a boost for Prime Minister Shinzo Abe’s economic policy mix, major domestic companies notified their labor unions Wednesday they will raise pay scales to conclude this year’s spring wage talks.
Attention will now shift to boosting wages for other workers, including those at smaller firms and across regions, as criticism grows that “Abenomics” has largely benefited employees of big exporters in large cities.
Abe, desperate to boost an economy squeezed by last April’s consumption tax hike, had requested companies boost wages.
Toyota Motor Corp. and Honda Motor Co. will offer their biggest-ever pay hikes, raising average monthly pay scales by ¥4,000 and ¥3,400, respectively. Nissan Motor Co. will increase its wage scale by ¥5,000, the biggest rise among manufacturers.
Six major electronics firms, including Hitachi Ltd., Mitsubishi Electric Corp., Panasonic Corp. and Toshiba Corp., have decided to raise their wage scales by ¥3,000 per month, the steepest hike on record.
The management of these export-oriented manufacturers failed to fully meet labor unions’ demands at this year’s shunto spring labor offensive. But it will be the companies’ second straight annual hike in pay scales, with their business performances improving on the back of the yen’s sharp depreciation under the Bank of Japan’s aggressive monetary easing, a key part of Abenomics.
A weaker yen usually bolsters the profitability of exporters by making Japanese products cheaper abroad and drives up the value of overseas revenue in yen terms.
Abe has implored business leaders to use higher profits to raise workers’ wages, saying it would help achieve his goal of creating a “virtuous economic cycle” in which higher salaries encourage consumers to spend more, thereby stimulating growth.
“It is important to invest in human capital. We are in an important position to beat deflation and bring Japan’s economy to a normal state,” Nissan Chief Competitive Officer Hiroto Saikawa said at a news conference in Yokohama.
Chief Cabinet Secretary Yoshihide Suga welcomed the decisions by the firms, saying during a news conference later Wednesday that “strong moves to raise wages have been spreading.”
Some companies, however, did not raise pay scales, amid shrinking domestic demand in the wake of the consumption tax hike to 8 percent from 5 percent.
Struggling electronics maker Sharp Corp.’s labor union refrained from submitting a pay-raise demand, effectively withdrawing from the unified labor talks of major domestic electronics firms.
The nation’s economy contracted for a second consecutive quarter through September last year, and rebounded just 0.4 percent from the previous quarter in real terms during the October-December period.
Average real, or inflation-adjusted, wages for employees slid 1.5 percent in January nationwide, down for the 19th straight month, data released by the Health, Labor and Welfare Ministry showed earlier this month.