Toyota and Honda Record Historic Wage Increases... Did Kishida's Plea Work?

First Labor-Management Agreement Accepts All Union Proposals
Kishida Also Promises Japan's Labor Union "Wage Increase Exceeding Inflation Rate"

[Asia Economy Reporter Jeon Jin-young] Japanese automobile companies Toyota and Honda have both accepted the union's proposals in their spring labor negotiations (Chuntu) and made a 'bold decision' by significantly raising the wage increase rates to record levels. With these decisions by the two companies, it is expected that a wave of wage increases will spread throughout the Japanese manufacturing industry. Behind this, there is an analysis that the companies have effectively accepted the wage increase pressure from the Kishida administration.

On the 23rd, Nihon Keizai Shimbun (Nikkei) reported that Toyota decided to accept all of the union's wage increase and bonus payment demands at the first labor-management consultation held the previous day. Honda did the same.

Toyota did not disclose the specific amount but stated that it would be the highest level in the past 20 years. According to the union's proposal, the bonus is expected to be equivalent to 6.7 months' salary.

On the 22nd, Koji Satou, the next president, is speaking at the Toyota Labor-Management Council. (Photo by Toyota Times)

According to 'Toyota Times,' published internally by Toyota, the next president, Satou Kouji, said at the negotiation, "Toyota must take the lead in distribution across the entire automobile industry." He added, "I hope that sincere dialogue between labor and management will proceed at each company with the spirit of cooperation with colleagues working together with Toyota."

Honda also accepted the union's demands outright at the labor-management consultation held the same day. The basic wage increase rate accepted by Honda is 3.3%, and in the case of promotions, it rises up to 5%. According to Honda, this basic wage increase is the highest amount since 1990, when data became available. Honda explained, "Labor and management share the recognition that accelerating change and resolving the anxiety caused by rapid high inflation are necessary."

[Image source=Yonhap News]

The reason why the wage increase issue of these major automobile companies is attracting attention is that the future wage increase trend in the industry can be predicted through them. In fact, in the manufacturing industry, Toyota's basic wage increase is regarded as the standard for wage negotiations. With the two companies making a magnanimous decision, the prevailing prediction is that this spring labor negotiation will focus on wage increases. It is even noteworthy that both companies quickly accepted the union's proposals in February, when the spring labor negotiations just began.

However, there is an analysis that this decision was influenced by pressure from Prime Minister Kishida. Japan has been in a state of wage freeze for nearly 30 years due to a long-term recession, compounded by energy supply issues and high inflation. In response, Prime Minister Kishida has continuously urged companies to raise wages as part of economic stimulus measures. Last month, he attended the New Year's gathering of the Japanese Trade Union Confederation (Rengo) and pleaded, "Please ensure wage increases exceed the inflation rate. The government will also support the response."

This content was produced with the assistance of AI translation services.