The two biggest Japanese automakers agreed to promote the biggest wage increase in decades, an early sign of dynamic mobility in the context of the 2023 collective bargaining. The initiative comes as the country’s central bank is examining possible signs of pressure on wages that will require a change in course. In particular, Toyota Motor agreed to give her the biggest pay rise in two decades, according to her union. The world’s largest automaker said yesterday that a deal had been reached in the first round of negotiations. However, he did not disclose the size of the percentage increase. Later that day Honda Motor she also said she would raise wages by 5%, including the biggest increase in base wages in almost 30 years. These decisions by heavy industry firms are the latest signal of an upward trend in wages as the highest inflation in 40 years erodes household purchasing power.

High raises from some of the biggest names in the Japanese business world can also put pressure on other companies to raise higher than usual. The path to workers’ compensation has been at the center of public debate in the country, with the Bank of Japan saying it will need stronger wage growth to ensure the price trend is sustainable. Its official inflation target is 2%, but even with base prices rising to 4%, the central bank remains committed to its massive stimulus program until wages also rise. Toyota, in particular, said it had agreed to raise wages, including base wages and bonuses, adding that for the third year in a row, the company has fully complied with union demands.

The implementation of workers’ compensation has been at the center of public debate in the country and under the microscope of the Bank of Japan.

It is worth noting that Toyota is often the first among Japanese companies to announce the results of the annual collective bargaining. In recent years, his workers’ union has demanded pay increases for 12 categories of employees based on position and hierarchy, as opposed to an average increase in base wages as a percentage. In addition, he said that this year’s bonuses will be equal to 6.7 monthly salaries. For its part, automaker Honda said the increase in wages per month would be $141. He also said that through them, priority will be given to younger workers, who are primarily affected by inflation. Finally, it is emphasized that the current governor of the Bank of Japan, Haruhiko Kuroda, who will be replaced in early April, said that a salary increase of 3% is enough to generate stable inflation at 2%.