Japan’s major companies are giving lower wage increases next fiscal
year as Prime Minister Shinzo Abe’s efforts to boost the economy falter.
Motor Corp agreed to increase monthly base salaries ￥1,500 (US$13) in
the year beginning next month, a statement from the company said
yesterday. That compares with a ￥4,000 increase this fiscal year.
Corp and Hitachi Ltd have also both agreed to a ￥1,500 wage increase
next fiscal year, separate statements from the companies said yesterday.
is half their hike for this business year. Japanese companies are
struggling with slowing profit growth, a weakening international outlook
and a strengthening yen, which threatens to cut profits earned
“The biggest reason companies are offering smaller pay
increases is because profits are not rising as much as last year,”
Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute in
Tokyo, said by telephone yesterday.
“There are also concerns about
the outlook for the economy, especially with uncertainty over China’s
growth. On top of that we’re seeing hardly any inflation,” Shinke said.
resistance is the latest indication that the virtuous cycle sought
under Abenomics — in which wage growth, higher consumption and price
hikes combine to drive sustainable economic growth — might be stalling.
largest automaker predicts net income would increase 4.4 percent in the
year ended this month, compared with 13.2 percent last fiscal year.
tide has turned,” Toyota president Akio Toyoda said after negotiations,
managing officer Tatsuro Ueda told reporters yesterday.
started with production rate increases and competitiveness and is
expanding to changes in the exchange rate and stronger than expected
environmental regulation in emerging countries,” Toyoda said.
Nissan Motor Co, Japan’s second-largest automaker, reduced its wage
hike to ￥3,000 for next fiscal year, the company said yesterday,
compared with ￥5,000 this year. Honda Motor Co agreed with its union on
￥1,100 raises, compared with ￥3,400 for this fiscal year, according to a
faxed statement from Japan’s third-largest automaker.
Holdings Co, Japan’s second-largest brewer by market value, is one of
the few companies bucking the trend, with its first wage increase in 15
The beermaker agreed to increase wages by ￥2,000, the first
base pay increase since 2001, as the company achieved its goal of
halting shrinking market share and booked higher profit than expected,
Kirin Holdings spokesman Daigo Yamazaki said yesterday.
steelmakers, which negotiate wage increases once every two years, are
also increasing base salaries for next fiscal year.
& Sumitomo Metal Corp, the nation’s largest, is to increase wages
￥1,500 a month next fiscal year, compared with ￥1,000 this business
year, the same as JFE Holdings Inc, the second-largest, the companies
However, Toshiba Corp, grappling with an
accounting scandal, is to keep base salaries flat, as is Sharp Corp,
which has agreed to a takeover by Foxconn Technology Group (富士康), the
companies said in separate statements.
Japan’s unions pared back wage demands early this year as the yen strengthened.
in Japan eked out a 0.1 percent raise last year, while incomes dropped
by 0.9 percent after adjusting for inflation. Real earnings have
declined for the past four years, holding back consumer spending.