Japan’s top companies raise wages as inflation hits workers

Leading companies in Japan have agreed to their highest annual wage increases in seven years, giving a boost to Prime Minister Pomio Kishida’s campaign for “new capitalism” that will help reduce the gap between rich and poor.

Big employers, including Toyota, Hitachi and Toshiba, have raised wages amid rising oil and wheat prices caused by the war in Ukraine that has raised the cost of everything from fresh food to energy. But only a handful of companies have met Kishida’s goal of raising wages by 3%.

After years of deflation, prices in Japan have already risen as a result of the corona plague and economists expect the country’s consumer price index to rise above 2% next month.

Since 2000, real wages have risen by only 0.39% and South Korea now surpasses Japan in average wages, according to OECD data.

Manufacturers, including of cars and electronics, have offered to raise salaries by an average of nearly 2,000 yen per month, according to Japan Metal Trade Council, the highest increase since 2015. Nippon Steel and NEC increased wages by 3 percent, while Hitachi increased Wages at 2.6%.

Shortly after winning the October election, Kishida pledged to address inequality in Japan and redistribute wealth from households to households, in what he described as a “new form of capitalism.”

“Management is more aware than usual of the need to invest in people,” JCM chairman Akihiro Kaneko told reporters. wage”.

Toyota reached an agreement at the beginning of its negotiations with the union representing its employees, and pledged to meet their full salary and bonus requirements. The company’s president, Akio Toyoda, thanked the workers for their efforts despite the uncertainty caused by the epidemic and the global shortage of chips that have damaged the car industry. Its rivals Nissan and Honda followed suit, agreeing to the demands of their unions.

UA Zensen, Japan’s largest industrial trade union that includes textile, trade and restaurant workers, said it had seen an average increase of 2.55% this year since Thursday, with more than 70% of its unions earning extra pay for their members beyond that. 2019 levels.

“Managements are more tolerant of wage increases than previously expected, as many companies have returned to their performance last year and are willing to retain talents with higher wages,” said Hisashi Yamada, deputy chair of the Japan Research Institute, a think tank.

He said that while it remains to be seen whether the services sector and small companies follow suit, the move by large companies was the first sign of a turnover of wage increases amid rising consumer prices.

However, UBS Japan economist Masamichi Adachi said Japan’s recovery from the epidemic was weaker than in the US and Europe, making the prime minister’s 3% target for raising wages “too ambitious”.

Japan’s top companies raise wages as inflation hits workers Source link Japan’s top companies raise wages as inflation hits workers

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