April 13, 2023

A National Confederation of Trade Unions (Zenroren)-affiliated think tank forecasts that a national minimum hourly wage of 1,500 yen would create more than 1.06 million new jobs.

The Japan Research Institute of Labor Movement (Rodo-soken) points out that a total of 28.23 million workers, including non-regular public employees, currently work at less than 1,500-yen hourly rates, accounting for 49.8% of the total workforce in Japan (56.72 million).

According to the Rodo-soken, a nationally-uniform hourly wage of 1,500 yen would push up domestic production by 17.9 trillion yen, contribute to the creation of 1,066,000 new jobs, and raise Japan's GDP by 10.5 trillion yen (1.9%). Consequently, an increase of 2.04 trillion yen in tax revenues would go into national and local coffers.

The Rodo-soken estimates that financial resources needed to increase hourly wages to 1,500 yen would be 16.1 trillion yen or 3.3% of corporate internal reserves of 484.4 trillion yen.

The Rodo-soken predicts that the rise of 16.1 trillion yen in the cost of labor will boost consumer prices. According to the Rodo-soken's calculation, in this case, prices of all products and services will go up by 1.58% on average and by more than 2% eventually.

The labor think tank points out, "If a 1,500-yen hourly wage is realized across the board nationwide, the Japanese economy will take a favorable turn accompanied by wage hikes and will help curb price increases generated by the weak yen."