TOKYO (Bloomberg) -- Toyota Motor Corp. agreed to increase base wages in Japan for the first time since 2008 as the nation’s largest company heads for record profits.
The average Toyota Motor Workers’ Union member will earn 2,700 yen ($26) more in base pay per month, Senior Managing Officer Naoki Miyazaki told reporters today. That’s 0.8 percent of last year’s average salary and below the 4,000 yen the union was asking for.
While a weaker yen has helped Toyota forecast a record 1.9 trillion yen ($18.49 billion) profit for the year ending March 31, the raise comes as Japanese companies brace for next month’s sales-tax increase, the first in 17 years. Prime Minister Shinzo Abe has been pressing employers to increase pay for workers to help end more than 15 years of deflation.
“If the Japanese economy was more likely to continue to grow for another 12 months, we would see much more robust growth in wages,” Takuji Okubo, chief economist at Japan Macro Advisors in Tokyo, said in a phone interview before Toyota briefed reporters in Toyota City, Japan.
When including the 7,300 yen average increase in pay that workers receive based on seniority or promotions, Toyota said its workers will get a 2.9 percent raise on average.
Toyota’s union, which represents more than 50,000 workers for the world’s largest automaker, was granted its request for the average bonus to rise to 2.44 million yen, the equivalent of 6.8 months of salary and the most in six years.
Other carmakers raised wages too. Nissan Motor Co. agreed to its union’s request for a 3,500 yen increase in base wages and bonuses equivalent to 5.6 months of salary, spokesman Chris Keeffe said by phone. Honda Motor Co. agreed to raise monthly base wages by 2,200 yen. Suzuki Motor Corp. won’t raise base salaries in Japan.
About 1,000 auto unions requested increases in base salaries for the upcoming year, the most since 2008, according to the Japan Confederation of Automobile Workers’ Unions. The average salary raise sought, excluding bonuses, was about 1 percent, or 3,048 yen a month.
Beyond cars, companies from Nippon Steel & Sumitomo Metal Corp. to retailer Lawson Inc. and Daiwa Securities Group Inc. have announced this month they’ll be raising base wages too.