TOKYO - Major Japanese corporations including Nissan Motor Co. and Hitachi Ltd. on Wednesday agreed on their biggest pay raises in decades in annual wage negotiations after their labor unions requested wage hikes that match rising prices.
Nissan said it will increase monthly wages by 12,000 yen ($89) on average, the largest hike since fiscal 2004 when the current wage system was introduced. It will also offer annual bonuses worth 5.5 months' salary as per its union's request.
That follows the decision by Toyota Motor Corp., which has a strong influence in setting the direction of the country's "shunto" pay negotiations every year, to offer biggest wage hike in 20 years. Honda Motor Co. has also agreed on biggest base pay hike in more than 30 years.
The trend extends well beyond the auto industry, with electronics giant Hitachi deciding on a 7,000 yen base pay hike, the biggest raise since 1998, and Sapporo Breweries Ltd. raising base wages by 9,000 yen, the biggest hike in 40 years.
The hefty pay raises came as Prime Minister Fumio Kishida has called on the business community to increase wages to mitigate financial burdens on households hit by soaring prices of everything from food to gasoline.
Core consumer prices in Japan jumped 4.2 percent in January from a year earlier, rising at the fastest pace since September 1981, according to government data.
The moves signal a shift away from the country's decades-old trend of stagnant wage growth, triggered by deflation after the collapse of the bubble economy in the early 1990s.
According to data compiled by Organization for Economic Cooperation and Development, the average wage in Japan rose 6.3 percent in 2021 from 1990. That compares with more than 50 percent increases in the United States and Britain during the same period.
The average wage in Japan for 2021 stood at $39,711, about half the level in the United States, which marked the highest compensation. The figure in Japan was also the lowest among other Group of Seven industrialized nations.
To bridge the gap with higher wages overseas, some companies have moved to introduce drastic measures. Uniqlo clothing chain operator Fast Retailing Co. said in January it would raise annual salaries of its domestic employees by up to 40 percent to retain talent.