Japanese automakers are raising workers’ wages in their home country for the first time since the global financial crisis in 2008.
The move was prompted by union pleas and Prime Minister Shinzo Abe’s efforts to battle over 15 years of deflation. According to the Detroit Free Press, the 50,000-plus members of the Toyota Motor Workers’ Union will receive a $26 per month bump in base pay. Factoring in pay increases based on seniority and promotions, Toyota says the average bump will be 2.9 percent per worker. In addition, average bonuses will rise to $24,093, or the equivalent of 6.8 months’ salary.
Nissan, for its part, will raise base pay for its union workers by $35 with bonuses equal to 5.6 months’ salary. Honda will hike wages by $22 and did not comment on bonuses.
Abe has been on an aggressive campaign to weaken the Japanese yen in order to gain a trade advantage, but many of Japan’s trading partners, including the US, are doing the same to their respective currencies. So far, his plan appears to have worked, with the best yen-to-dollar exchange rate since 2009, but which is still below pre-2008 rates. Still, the strategy has helped Toyota add $1.9 billion to its already substantial cash pile.
The wage increase will also help workers offset Japan’s first increase of its national sales tax in 17 years.
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