As Japan’s largest company and the biggest automaker in the world is forecasted to reach record profits in 2014, Toyota has finally gave in to union requests in its home country to raise the base salary, a first since 2008.
According to Senior Managing Officer Naoki Miyazaki, the base wage increase for each Toyota Motor Workers’ Union average member would go up by 0.8% compared to last year’s salary, going up by a monthly 2,700 yen ($26) – below the 4,000 yen figure the union asked.
“Deflation should be eliminated from Japan as quickly as possible,” Toyota’s Miyazaki said today. “Toyota and the union will make a contribution. We have a role to play.”
“If the Japanese economy was more likely to continue to grow for another 12 months, we would see much more robust growth in wages,” said Takuji Okubo, chief economist at Japan Macro Advisors in Tokyo.
While Prime Minister Shinzo Abe has been repeatedly asking companies to increase pay to end more than 15 years of deflation, the Japanese businesses are also preparing for the first sales-tax increase in 17 years, due for next month.