TOKYO: Monday marks the start of a new fiscal year in Japan, ushering in changes such as the implementation of overtime limits on truck drivers, construction workers, and doctors.

The limits, part of work-style reform efforts, are spurring worries about possible service disruptions due to labor shortages. The situation is particularly serious in the trucking industry, where the issue is called the 2024 problem.

Meanwhile, price increases are likely to continue for foods and other products. Household finances are expected to face growing burdens in fiscal 2024 as well.

The new regulation, based on the revised labor standards law, caps annual overtime at 960 hours for truck drivers and 720 hours for construction workers. For doctors, the limit will be set at a maximum of 1,860 hours per year depending on reasons such as the need to maintain regional medical care.

The caps are feared to cause shortages of workers, making it difficult to maintain services. One estimate has shown that the logistics industry will face a 34% shortfall in transportation capacity in 2030.

Logistics companies Yamato Transport Co. and Sagawa Express Co. are set to raise their parcel delivery fees at the start of April on Monday, in a bid to improve working conditions for delivery workers and counter labor shortages. Combined with hikes reflecting higher fuel costs, their fees will be raised by an average of around 2% and 7%, respectively.

As a measure to deal with a lack of taxi drivers, the government will partially allow ride-sharing services from April. The services, in which general drivers offer paid rides using their private vehicles, will be available in certain times and locations, such as parts of Tokyo.

Food makers will continue moves to pass on higher ingredient and logistics costs to consumers. According to research firm Teikoku Databank Ltd., the prices of over 2,800 food items will be raised in Japan in April, with prices of meat products, including ham, and seasonings slated to rise markedly.

Electricity fee surcharges to promote the use of renewable energy will also go up. The total for fiscal 2024 will increase by some 10,000 yen for a standard household consuming 400 kilowatt-hours per month.

Public medical and pension system reforms will also kick in at the turn of the fiscal year.

Public pension benefits will increase by 2.7% from the previous fiscal year following higher prices and wages, amounting to an increase of 6,001 yen in monthly benefits for a couple under the “kosei nenkin” program for corporate and government employees.

However, the government will activate the so-called macroeconomic slide mechanism curbing the rise in benefits to maintain the pension system’s financial stability. As a result, pensions will decline in inflation-adjusted real terms.

The annual limit on premiums for public health insurance will be raised from the current 1.04 million yen to 1.06 million yen.

Premiums will go up, especially for people with high incomes aged 75 or older, affecting 5.4 million people whose annual pension incomes exceed 2.11 million yen. A person with an annual income of 4 million yen will see a 14,000-yen increase per year.

Labor-management wage negotiations are still underway at small businesses. The focus is on whether pay hikes can catch up to the pace of inflation.

The size of wage increases at companies that have concluded negotiations came to 5.25% as of March 21, according to the Japanese Trade Union Confederation, or Rengo.

Changes in real wages have become “even more likely to turn positive within this year,” an official at Daiwa Institute of Research Ltd. has said.

Close attention is being paid to whether the wage hikes will lead to a recovery in household purchasing power.

JIJI Press