updated - August 14, 2020 Friday EDT
Toyota Motor Corp. announced it will be giving raises to workers in Japan for the first time since 2008.
The average monthly base pay for union workers will be raised by 2,700 yen ($26), according to the New York Times. The raise will amount to 0.8 percent of total monthly pay.
On Wednesday, most of Japan's leading industries announced their annual wage negotiations due to Prime Minister Shinzo Abe's push for companies to give raises. Abe believes the raises could help improve household spending and pull Japan's economy out of the deflation it has been experiencing for twenty years, Reuters reported.
Toyota Senior Managing Officer Naoki Miyazaki talked to reporters at the company's central Japan headquarters about the benefits of the raises.
"There is a certain role that (Toyota's) labor and management are expected to fulfill in order for the Japanese economy to step out of deflation and attain a virtuous cycle," Miyazaki said. "While we have that in mind each year during negotiations, this year that was a little bit more important than usual."
Japan's 52 largest manufacturers agreed to give workers a raise, although they were not at the rates demanded by union members. Union workers at Toyota only received two thirds of the 4,000 yen monthly raise they demanded, the New York Times reported.
"The results do not meet all of our demands, but do go some way toward fighting deflation and bringing about economic growth," said Koichiro Nishihara, head of the metalworkers' union group.
Toyota said its workers will receive a 2.9 percent raise on average, and that workers will receive an average of 7,300 yen increase in pay based on promotions and seniority, Automotive News reported. The company's union represents over 50,000 workers for Toyota. The company agreed to the union's request for the average bonus increase to 2.44 million yen, which equals 6.8 months of salary and is the biggest bonus in six years.
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