Major Japanese Firms Contracts Wage Strings as Coronavirus Clouds Economic Development
Against the backdrop of the coronavirus outbreak and a lingering global economic downturn, leading Japanese corporations are preparing in influential annual wage deals that had been hammered out with unions Wednesday.
Setting the tone, bellwether Toyota Motor stated Wednesday it had agreed to give staff an average month-to-month pay raise that’s 20% lower than 2019’s hike.
Major steel manufacturers followed suit and shelved base pay hikes, threatening PM Shinzo Abe’s lofty target of producing a self-sustaining growth cycle – a crucial plank of his ‘Abenomics’ policies to stimulate the world’s third-biggest economic system.
Over the past six years, major companies raised wages over 2% each spring as Abe pressured companies to boost pay to bring an end to deflation and stagnation that has dogged Japan for 20 years.
Bank of Japan’s Governor Haruhiko Kuroda has said he would watch the result of the wage discussions for a clue to gauge the price trend, as the central bank could expand monetary stimulus next week to counter the fallout from the spread of the coronavirus epidemic.
Rather than elevating base pay, Toyota agreed to an average rise of 8,600 yen ($82.31) monthly for all employees, a portion of which will be invested in steps to enable staff to grow their careers, such as work experience in other sections and regions.