Toyota Motor, the world’s biggest automaker, held off on Wednesday from offering responses to its union’s demand for hefty pay hikes and record bonuses, raising some uncertainty about expectations for rosy wage negotiations. Toyota has long served as the pace-setter of Japan’s annual spring labour-management wage offensive and had accepted the union’s demand in full on the first day of the annual wage negotiations in the past two years.
A spokesperson for the automaker said talks would continue onto the next round. The labour-management talks are scheduled to take place two more times on February 28 and March 6, before formally offering 2024 pay hikes on March 13, along with other blue-chip Japanese companies. If Toyota agrees to the union’s demands in a whole, it would mark the fourth straight year of full acceptance. The Federation of All Toyota Workers’ Union demands record bonus payments worth 7.6 months of salary while seeking monthly pay raises of up to 28,440 yen ($189.57) depending on job qualifications and occupation.
Japanese labour unions have entered this year’s annual wage talks with demands for pay rises well more than last year’s hikes, which were the biggest in more than three decades. Many blue-chip companies are due to formally offer unions handsome pay increases on March 13, followed by small firms in the coming months. Private-sector economists expect major firms to offer wage hikes of about 3.9 per cent, the largest in 31 years. Excluding seniority-led pay scale, however, base pay that determines the strength of incomes may undershoot rising prices, heaping downward pressure on real wages.
Prime Minister Fumio Kishida’s government is counting on wage talks to drive sustainable pay hikes and stable inflation and put a decisive end to about two decades of deflation.
This year’s labour talks will be closely watched by the Bank of Japan, which sees sustainable wage and price hikes as a prerequisite for the central bank to normalise monetary policy.
If workers manage to secure the expected wage hikes, that could lay the ground for the BOJ to exit its negative rates as early as in March or April.