On Wednesday, Toyota Motor (7203.T), the world’s largest automaker, refrained from responding to its union’s request for substantial pay raises and record bonuses. This lack of response raises doubts about the prospects for successful wage negotiations.
For years, Toyota has spearheaded Japan’s annual spring labor-management wage offensive. In the last two years, the company promptly accepted the union’s demands in full on the first day of the negotiations. This demonstrates Toyota’s consistent and influential role in these annual wage discussions.
A spokesperson for the automaker stated that talks would continue into the next round.
The labor-management talks are set to resume twice more, first on February 28 and then on March 6. Following these discussions, pay increases for 2024 will be formally proposed on March 13, aligning with other blue-chip Japanese companies. If Toyota agrees to all of the union’s demands, it will be the fourth consecutive year of full acceptance.
The Federation of All Toyota Workers’ Union is demanding record bonus payments totaling 7.6 months’ salary. Additionally, they are seeking monthly pay raises of up to 28,440 yen ($189.57), based on job qualifications and occupation.
In this year’s annual wage negotiations, Japanese labor unions are making demands for pay increases, surpassing the substantial hikes seen last year—the largest in over three decades. The unions are actively seeking improved compensation packages.
On March 13, numerous blue-chip companies are anticipated to formally present substantial pay increases to unions. Small businesses are expected to follow suit in the upcoming months.
Private-sector economists expect major firms to raise wages by about 3.9%, the most in 31 years. Excluding the seniority-based pay scale, base pay, determining the strength of incomes, may undershoot rising prices. This puts downward pressure on real wages.
Prime Minister Fumio Kishida’s government anticipates that wage talks will yield sustainable pay increases and stable inflation. This marks a potential conclusion to nearly two decades of deflation.
This year’s labor talks will be closely monitored by the Bank of Japan. It considers sustainable wage and price increases essential for normalizing monetary policy.
Securing the expected wage increases, workers may prompt the BOJ to exit its negative interest rate policy. This could happen as early as March or April.
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