Toyota $TM Motor agreed to give factory workers in Japan their biggest pay raises in 25 years on Wednesday as inflation remains at historically high levels.
Several other major car brands — including Nissan, Mazda, and Honda — are also hiking pay
Toyota $TM Motor agreed to give factory workers in Japan their biggest pay raises in 25 years on Wednesday as inflation remains at historically high levels.
The wage hikes were agreed upon as part of this year’s “shuntō” wage talks, an annual event where management officials of major Japanese firms meet with labor unions to discuss pay raises for the year ahead. The precedent established at the spring event extends its influence past the firms that meet with unions directly, affecting wages at smaller firms that employ the majority of Japanese workers.
Toyota is the world’s largest carmaker and a leader in annual negotiations. the automaker fully agreed to its labor union’s demands for monthly pay raises of as much as 28,440 yen ($193) and record bonus payments, according to local reports. Nissan Motor also fully met its labor union’s demands, agreeing to an average 18,000 yen ($121) increase in monthly pay. Honda $HMC Motor and Mazda Motor have also agreed to record pay raises for their workers.
“We’re seeing strong momentum for wage hikes,” Japan’s chief cabinet secretary, Yoshimasa Hayashi, told reporters in a news briefing Wednesday. “It’s important that the strong wage hike momentum will spread to small and mid-sized firms.”
The Japanese Trade Union Confederation, RENGO, said more than 3,100 affiliated unions had demanded an average wage hike of 5.85%, or ¥17,606 ($118), compared with 4.49% in 2023; if management officials agree to their demands, it would be the first time since 1993 that pay raises above 5% have been granted. Japan Research Institute senior economist Hisashi Yamada told Reuters he expects overall increases of 4.2% to 4.3% and potentially more than 5% for top forms.
The wage increases abroad mirrors a growing trend in the U.S. after the United Auto Workers (UAW) negotiated record pay increases from the Detroit Big Three automakers — Ford $F Motor Co., General Motors $GM, and Stellantis $STLA — last year.
In the wake of those wins, several automakers with non-union factories have raised their own wages and accelerated pay progression to fend off a growing organizing challenge. Those include Toyota, Tesla $TSLA, Volkswagen Group, Nissan, Subaru, and Hyundai Motor Co.
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