Japanese Government Orders "Raise Wages"... Large Corporations Fully Accept Union Proposal

Mitsubishi Accepts Union Demands Without Changes for First Time in 49 Years
Toyota: "Highest Level Increase in Over 20 Years"

As the Japanese government urged companies to actively raise wages amid rapid price increases, major corporations are actively complying.

According to the Nihon Keizai Shimbun (Nikkei) and others on the 15th (local time), large Japanese manufacturers have recently accepted 100% of the union's wage increase demands. This day was the "concentrated response day" when management responds to the union's wage increase proposals, and companies such as Fujitsu and Kawasaki Heavy Industries accepted the union's proposals as they were.

Accordingly, major electrical and electronics companies such as Fujitsu, Hitachi, Toshiba, and NEC decided to raise the base salary by 7,000 yen (about 68,000 won). This is more than double last year's increase (1,500 to 3,000 yen). The wage increase rate, combining regular promotions and base salary increases, is reported to be similar to the recent consumer price inflation rate of 4%.

The appearance of the Toyota Motor Corporation logo. [Image source=Yonhap News]

Earlier, automobile companies such as Toyota Motor and Honda accepted the union's demands early on the 22nd of last month, before the concentrated response day. Toyota stated it was the "highest increase in the past 20 years," but did not disclose the average wage increase amount. Honda also decided to raise the monthly salary, including the base salary, by 19,000 yen (about 180,000 won), which is approximately 5% in total.

Heavy industry companies such as Mitsubishi Heavy Industries and IHI also accepted 100% of the union's demands for the first time in 49 years, raising the base salary by 14,000 yen (about 136,000 won). Mitsubishi's wage increase rate reaches 7% on an annual salary basis.

Additionally, Fast Retailing, which operates the fast fashion brand "Uniqlo," raised the monthly salaries of new employees and new store managers by 17.6% and 34.5%, respectively, resulting in an overall wage increase of 40% starting this month.

Japanese media analyzed that "major corporations have judged that wage increases are essential to respond to rapid price rises and to secure digital talent."

Last year, Japan's annual consumer price inflation rate was 2.3%, which, excluding the impact of the consumption tax hike, was the highest level in 31 years since 1991.

Earlier, Prime Minister Fumio Kishida warned that "if wage growth does not keep up with price increases, the economy could fall into stagflation (economic stagnation with rising prices)" and requested corporate management to raise wages by at least 3%.