Japan Press Weekly

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2020 August 19 - 25 [LABOR]

Corona crisis clearly demonstrates the need to raise minimum hourly wages

National Confederation of Trade Unions (Zenroren)-member unions have been demanding an increase in minimum hourly wages to support workers who are suffering from income losses due to the ongoing COVID-19 pandemic. These unions also argue that higher minimum wages are especially vital for "essential workers" who provide community healthcare, logistics operations, and various retail businesses.

However, as a result of discussions at the regional minimum wage councils, the national average of the minimum hourly wage will be increased by only one yen to 902 yen.

This is partly because Prime Minister Abe Shinzo, in response to the demand of business circles for a "freeze" on an increase in minimum hourly wages, instructed a government council regarding minimum wages to "take into consideration the severe financial situations facing small- and medium-sized enterprises" by using the coronavirus pandemic as a pretext.

Of course, it is necessary to give support to SMEs. However, out of the 2-billion-yen budget for "business improvement subsidies" for SMEs, the government put only 300 million yen into use in fiscal 2019. This fiscal year, the government lowered the budget to support SMEs to 1.1 billion yen.

According to a survey Zenroren conducted in four prefectures this year, a 25-year-old single man would need an hourly wage of at least 1,657 yen to cover the minimum costs of living in Okayama, 1,699 yen in Nagano, 1,642 yen in Okinawa, and 1,687 yen in Ibaraki. In fact, there is not much difference from Tokyo's 1,664 yen.

The survey shows that the Zenroren demand for a minimum wage hike to at least 1,500 yen nationwide, not 902 yen on national average, is in fact moderate.

Past related articles:
> PM Abe hampers wage hikes citing SMEs' severe financial condition despite cutting back SME support [August 1, 2020]
> Labor Ministry’s panel gives in to business circles’ pressure not to raise minimum wages [July 23, 2020]