Labor unions at all of Japan’s automakers are seeking an increase in base salaries and bonuses, as companies including Toyota Motor Corp. and Honda Motor Co. forecast record profits this fiscal year.
At the annual spring labor negotiations, auto workers will seek yearly bonuses exceeding five months of salary, the first time in 15 years that unions have asked for the amount, according to Yasunobu Aihara, president of the Confederation of Japan Automobile Workers’ Unions.
“The Japanese economy is at a major turning point,” Aihara said in a briefing in Tokyo today. “To end the prolonged deflation and to ensure the nation’s economy will revive and grow sustainably, all member unions decide to ask for an increase in monthly base pay.”
Analysts estimate that Japan’s biggest automakers, with the exception of Nissan Motor Co., will post record profits for the year ending March, as economic policies under Prime Minister Shinzo Abe weaken the yen and boost the repatriated value of cars exported from Japan. Abe has urged companies to raise wages faster than gains in the cost of living, as the squeeze on consumers from higher prices risks undermining his public support and his fiscal, monetary easing policies and growth strategies.
Workers at Toyota, the country’s highest profit earner, will ask for a 4,000 yen average increase in monthly wages and annual bonuses valued at 6.8 months’ salary, according to a Jan. 30 statement from the union. The raise in base salary will be the first in five years if Toyota meets the request.
Toyota agreed last year to a union proposal for a 2013 average bonus of about 2.05 million yen, the biggest in five years. It paid a 2.51 million yen bonus in 2008, according to the workers’ union.
The labor union at Honda, Japan’s third-biggest carmaker, has decided to ask for an average increase of 3,500 yen in monthly wages starting in April. The union has not asked for a base salary wage increase since 2010.
Abe’s economic program, known as Abenomics, spurred a 51 percent advance in the Topix index of shares last year, and an 18 percent plunge in the yen versus the dollar.
The wage increases in Japan will probably fail to keep pace with inflation, highlighting risks that the nation’s recovery will stall, surveys of economists show.
Labor cash earnings, the benchmark for wages, will increase 0.6 percent in the year starting April 1, according to the median forecast in a poll of 16 economists by Bloomberg. Consumer prices will climb five times faster, increasing 3 percent, as Japan raises a sales tax for the first time since 1997, a separate Bloomberg survey shows.
The prime minister has pressed Japan Inc. to pass some of the windfall to workers through higher base pay, in meetings with business and union leaders since September. The three sides said in a joint statement in December that increased profits should be linked to wages.
Japan can’t wait one or two years for salary gains, which are needed sooner for the economy to enter a virtuous cycle of rising profits, wages and growth, Deputy Economy Minister Yasutoshi Nishimura said in December.
Japan’s confederation of worker unions has a membership of about 762,000, according to its website.