Major Japanese firms offer lower wage hikes amid global, domestic economic concerns

Source: Xinhua| 2019-03-13 16:13:27|Editor: xuxin
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TOKYO, March 13 (Xinhua) -- Major firms in Japan on Wednesday offered their employees a rise in wages that was lower compared to a year earlier amid uncertain global and domestic economic outlooks.

Last year, Prime Minister Shinzo Abe, in a bid to help pull the nation out of a decades-long deflationary quagmire, urged companies to hike wages by three percent, specifically.

During this year's spring negotiations between labor unions and managements, the Japanese premier encouraged wages to be increased for the sixth successive year, but held back on explicitly referencing an exact percent.

Bellwether firm for the wage negotiations, Toyota Motor Corp., offered its employees a hike of 10,700 yen (96 U.S. dollars) on average a month, with the amount dropping by 1,000 yen (9 U.S. dollars) compared to the previous year.

Toyota's union had been seeking a raise of 12,000 yen (107 U.S. dollars) for each of its employees.

Nissan Motor Co., whose employees have been rocked by the arrest of the automaker's former chairman Carlos Ghosn, offered its employees a pay raise of 3,000 yen (27 U.S. dollars) equaling that of its raise offered per month a year earlier.

Honda Motor Co.'s pay raise this year, meanwhile, will be 1,400 yen (12.5 U.S. dollars) a month per employee, a drop of 300 yen on year.

Domestic automakers such as Toyota, once the cream of hybrid technology with its ubiquitous Prius models being rolled out globally since 1997, are now grappling to increase investments to bolster competitiveness and meet the growing demand for electric vehicles, and, as such, have erred on the side of caution when raising wages, local industry insiders said Wednesday.

With concerns about the outlook for the global economy remaining murky amid the European Central Bank lowering its outlook for growth in the single currency eurozone while unleashing more monetary easing measures to help support financial institutions, and uncertainties over Britain's plans to leave the European Union, a number of blue-chips here have slashed their earnings forecasts.

Global concerns have also been amplified by domestic issues, with the outlook for sentiment in the service-sector looking bleak in the coming months, and machinery orders -- a key advance indicator for corporate capital spending in a six to nine month period ahead -- tumbling more than five percent according to government data released Wednesday.

With subsequent cost-cutting measures being implemented across the board for many major firms here, wage increases at companies like Panasonic Corp. and Hitachi Ltd. have been cut this year by 500 yen to a 1,000 yen increase on average per employee a month.

The Japan Business Federation, known here as Keidanren, as the nation's most powerful business lobby, has encouraged its member firms to focus resources on improving employees' benefits, such as better accommodating working parents, rather than solely focusing on increasing monthly wages.