Toyota, Nissan lead Japanese companies in approving wage hikes

March 13 (UPI) -- Nissan and Toyota are leading some of Japan's largest companies in offering large pay raises for the second straight year on Wednesday as the country fights chronic deflation in its economy.

Japan's Prime Minister Fumio Kishida and his government had been calling on the business community to step up on offering better pay for workers at a pace that exceeds inflation. In its negotiations with labor unions, the auto companies are offering the largest pay increases in years.

Toyota set the benchmark during its negotiations with a monthly pay raise of $193, its largest since 1999. Nissan followed by increasing monthly wages by about $122 on average, its largest increase since 2005. Nippon Steel surpassed its union's request to hike its monthly pay by $237.

To keep up with the trend, Honda and Mazda also agreed on pay raises along with Japan Airlines and Ajinomoto.

Shinichiro Kobayashi, an economist at Mitsubishi UFJ Research and Consulting, told the Japan Times that salaries there had fallen off pace with inflation and salary adjustments were needed to stabilize the economy.

"Small and midsize enterprises will probably raise wages as well, but I think it will be quite difficult for them," Kabayashi said. "If they are unable to sufficiently keep up with [the pay raise trend], it is possible that the macro-based wage increase rate will not grow as much as expected."

The Japanese Trade Union Confederation, or Rengo, said pay raises among its members have increased by 3.58% from last spring. Companies with more than 1,000 workers increase employee salaries by 3.69%, the union said.