The higher wage hikes offered by major automakers and electronics firms to their employees — as widely forecast — may be a first step toward reviving consumer spending, but the bigger question remains whether the trend will be sustained and spread broadly across industries and among smaller businesses. It also remains unknown whether the nation's growing ranks of irregular workers will share the benefits of record earnings at blue-chip firms.
In the annual wage talks with their labor unions, top automakers such as Toyota and Nissan as well as electronics makers such as Hitachi and Panasonic settled last week with raises in their workers' basic monthly pay scale that considerably exceeded the levels offered last year, although they still fell short of the union demands. Toyota, which expects to earn record profits for the second year in a row in the business term through the end of the month, offered a ¥4,000 hike in the monthly wage base, up by ¥1,300 from the raise a year ago, in addition to meeting its union's call for bonuses amounting to 6.8 months of wages.
The Abe administration, which for the second year in a row added unusual pressure — and incentives in the form of corporate tax cuts — on corporations operating in the black to turn their improved earnings into higher wages for their employees, hailed the moves. Economy revitalization minister Akira Amari gave "90 points" out of 100 to the wage hikes by the big firms. Share prices on the Tokyo Stock Exchange were boosted by expectations that the higher wage hikes by companies would stimulate consumer spending and shore up businesses' profits — along the scenario envisaged by the administration.