[Japan] Average minimum wage will increase in October

[Japan] Average minimum wage will increase in October
04 Aug 2022

Japan is set to increase its average minimum wage to 961 yen (US$7.28) an hour, a record rise of 31 yen (or 3.3 per cent) from the current minimum, New Straits Times reports.

The minimum wage increase is expected to be implemented in October and follows a government panel reaching an agreement on the proposal. The announcement ends prolonged consultations as Japan battled rising inflation in the wake of the Russia-Ukraine conflict.

Labour and management representatives on the panel agreed on the need for higher pay but differed over how much the rise should be with inflation taken into account, according to a Kyodo News report

The Central Minimum Wages Council's subcommittee of the Labour Ministry finally agreed on the pay hike on August 1. It had failed to reach an agreement in late July.

In 2021, the council proposed that the minimum wage for all workers - including part-timers and contract workers - should be raised by 28 yen to 930 yen.

The need for a pay rise was reportedly exacerbated by the conflict in Ukraine which caused energy, raw material and food prices to rise globally. Core consumer inflation in Japan has topped two per cent in recent months, putting pressure on households and increasing the calls for higher pay.

The Asahi Shimbun said the subcommittee established minimum wage guidelines for four groups of prefectures, depending on their economic situations.

Each prefectural government will then decide the minimum wage raise for their prefectures based on the guidelines.

The new minimum wage will then be introduced in each prefecture around October.

The minimum wage has been raised by around three per cent in recent years, in part as a result of government pressure.

Employers who fail to pay the minimum amount will be fined by the authorities.

The Kyodo News report said the Japanese government was aiming to increase the minimum wage in the country to 1,000 yen as soon as possible.

Prime Minister Fumio Kishida had called for more investment in the people as he focused on redistribution of wealth under his slogan of a "new capitalism."

"We'd like to see an increase that would be appropriate for the era of a new capitalism," Deputy Chief Cabinet Secretary Seiji Kihara said in a recent press briefing.

Japan's minimum wage is considered low compared with other major economies and there are also gaps between urban and rural areas.

Last year, the highest minimum wage was 1,041 yen in Tokyo while the lowest was 820 yen in Kochi and Okinawa prefectures.

Weak wage growth is said to be a significant reason why the central Bank of Japan needs to maintain its ultralow rate policy.

The general consumer price index - used to calculate real wages - has risen by around three per cent year on year for three consecutive months.

The domestic corporate goods price index, an index of prices sold and bought between companies, has also risen by more than nine per cent year on year since the beginning of this year.


Source: New Straits Times

(Quote via original reporting)

Japan is set to increase its average minimum wage to 961 yen (US$7.28) an hour, a record rise of 31 yen (or 3.3 per cent) from the current minimum, New Straits Times reports.

The minimum wage increase is expected to be implemented in October and follows a government panel reaching an agreement on the proposal. The announcement ends prolonged consultations as Japan battled rising inflation in the wake of the Russia-Ukraine conflict.

Labour and management representatives on the panel agreed on the need for higher pay but differed over how much the rise should be with inflation taken into account, according to a Kyodo News report

The Central Minimum Wages Council's subcommittee of the Labour Ministry finally agreed on the pay hike on August 1. It had failed to reach an agreement in late July.

In 2021, the council proposed that the minimum wage for all workers - including part-timers and contract workers - should be raised by 28 yen to 930 yen.

The need for a pay rise was reportedly exacerbated by the conflict in Ukraine which caused energy, raw material and food prices to rise globally. Core consumer inflation in Japan has topped two per cent in recent months, putting pressure on households and increasing the calls for higher pay.

The Asahi Shimbun said the subcommittee established minimum wage guidelines for four groups of prefectures, depending on their economic situations.

Each prefectural government will then decide the minimum wage raise for their prefectures based on the guidelines.

The new minimum wage will then be introduced in each prefecture around October.

The minimum wage has been raised by around three per cent in recent years, in part as a result of government pressure.

Employers who fail to pay the minimum amount will be fined by the authorities.

The Kyodo News report said the Japanese government was aiming to increase the minimum wage in the country to 1,000 yen as soon as possible.

Prime Minister Fumio Kishida had called for more investment in the people as he focused on redistribution of wealth under his slogan of a "new capitalism."

"We'd like to see an increase that would be appropriate for the era of a new capitalism," Deputy Chief Cabinet Secretary Seiji Kihara said in a recent press briefing.

Japan's minimum wage is considered low compared with other major economies and there are also gaps between urban and rural areas.

Last year, the highest minimum wage was 1,041 yen in Tokyo while the lowest was 820 yen in Kochi and Okinawa prefectures.

Weak wage growth is said to be a significant reason why the central Bank of Japan needs to maintain its ultralow rate policy.

The general consumer price index - used to calculate real wages - has risen by around three per cent year on year for three consecutive months.

The domestic corporate goods price index, an index of prices sold and bought between companies, has also risen by more than nine per cent year on year since the beginning of this year.


Source: New Straits Times

(Quote via original reporting)

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