Feb 20 2015

Japanese car manufacturers have requested the highest salary hike in more than a decade which could promote salary increments in other industries and support the goals of the Japanese government to combat deflation, in Tokyo, Feb 19. Unions from manufacturers such as Toyota Motor, Nissan Motor, Honda Motor and Fuji Heavy Industries have asked for a steady increase of $50 a month in the traditional negotiations with the companies, the Yomiuri newspaper reported it on Thursday. The private sector has committed, at the request of the Japanese government in exchange for cuts in taxes, to raise this year's payroll so that the increase in consumption tax does not drown Japan's economy.

 

The companies' response to these demands will be known by mid-March. And the increase is 50 percent greater than last year's, and comes as four of the eight major Japanese car makers are expected to reap record profits given the weakness of the yen. The union demands are also in line with the recommendations of Rengo, the largest labor union in Japan, which has suggested the wage bill increase by at least 2 percent inter-annually to offset the increased consumption tax, which rose from 5 to 8 percent in April 2014. The revival of the demand would not only boost Japan's gross domestic product, but would strengthen the upward trend in prices that is driving the Japanese government to try and exit a deflationary cycle of two decades.