Japan Press Weekly

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2023 May 24 - 30 [LABOR]

Minimum wage hike to \1,500 and eradication of regional gaps in wages urgently needed

Akahata editorial (excerpts)

Consumer prices rose to 3.4% in April on a year-on-year basis. The rise in consumer prices has continued for 12 months in a row. Regarding electricity bills, the government has approved seven major power companies’ applications for 15-43% hikes. The surge in the price of food and other daily necessities is hitting hard especially low-income earners.

The national average of minimum hourly wages increased to 961 yen in October 2022. This means that full-time minimum wage workers earn only 1.7 million yen a year and are categorized as members of the working poor.

In contrast to Japan, minimum wages in other countries increased drastically. The minimum wage went up to 2,195 yen in Washington State, 1,965 yen in Australia, and 1,690 yen in France.

In Japan, a regional gap in minimum wages is another problem. The highest is Tokyo’s 1,072 yen and the lowest is 853 yen in Aomori and nine other prefectures.

A cost-of-living survey conducted by the National Confederation of Trade Unions (Zenroren) shows that there is not much difference in the minimum living cost between prefectures in Japan because living in the city needs high housing expenses while living in the country is normally associated with the need to pay more for car commuting costs.

A substantial minimum wage increase will largely contribute to boosting Japan’s economy. The labor think tank, Japan Research Institute of Labor Movement (Rodo-soken), in February published its estimate regarding an impact on Japan’s economy of a minimum hourly wage increase to 1,500 yen. Rodo-soken pointed out that a total of 28.23 million workers, including non-regular public employees, currently work at less than 1,500-yen hourly rates, and said that a 1,500-yen hike in these workers’ hourly wages will push up domestic production by 17.9 trillion yen, create 1.06 million new jobs, and raise Japan’s GDP by 1.9%.

Regarding a substantial increase in minimum wages, the vital thing is to provide financial support to small- and mid-sized enterprises. A drastic improvement in SME support measures can be achieved with the use of ten trillion yen in additional national revenues from the 5-year levy of a 10% tax on large corporations’ internal reserves amounting to 500 trillion yen. The urgent need now is for Japan to increase the minimum wage to 1,500 yen and narrow the regional gap in hourly rates.

Past related article:
> Trade union think tank estimates that minimum hourly wage of \1,500 would create 1-million new jobs [April 13, 2023]