Toyota Japan Accepts Largest Wage Increase in Two Decades

As reported in our February Newsletter, the Japanese government has strongly encouraged employers to increase wages in the current Shunto.  Toyota has long been regarded as a bellwether company, and in accepting the Union’s demands for salary and bonus increases the company’s President was quoted as saying their decision was "also for the industry as a whole, and in the hope that it will lead to frank discussions between labour and management at each company."

Shortly after, Honda followed suit and announced a 5% salary increase had been negotiated with the unions; this is the largest increase since 1990, and the company will reportedly focus on raising the starting salaries of younger workers.  Despite a net profit reduction, gaming company Nintendo has announced a wage increase of 10%, in an effort to secure its workforce in an industry with a historically tight labour market.

Outlook for Employers: As mentioned in February, this year’s Shunto was a case of ‘who blinked first’.  The nationwide economic impact of Toyota’s decision was not lost on the President of Toyota, who was quoted as saying this was a “terrifyingly difficult decision to make”.  The landscape for 2023 has now been established, and employers should therefore anticipate the negotiations with unions and employees will reflect this established trend.