TOKYO: A Japanese labor ministry panel agreed Friday to raise the country’s weighted average minimum hourly wage by 41 yen from the previous year to 1,002 yen in fiscal 2023.

If the minimum wage in each prefecture is revised in line with the agreement, the nationwide weighted average will exceed the 1,000-yen threshold for the first time ever.

The increase is even larger than the 31-yen rise in fiscal 2022, which was the biggest minimum wage increase since fiscal 2002.

The subcommittee of the Central Minimum Wages Council, which advises the labor minister, agreed to call for raising the minimum hourly wage by 41 yen in six prefectures, including Tokyo and Osaka, by 40 yen in 28 prefectures, including Miyagi, Kyoto and Hyogo, and by 39 yen in the remaining 13 prefectures, including Aomori and Okinawa.

Based on the recommendations, each prefecture’s minimum wage will be decided through discussions at prefectural councils.

In this year’s talks at the subcommittee, the labor side stressed the need to raise minimum wages substantially, claiming that it was becoming difficult to make a living due to rising prices.

The labor side called for the minimum hourly wage to be 900 yen or higher in all prefectures by raising it by 47 yen in 10 prefectures, including Okinawa, whose minimum wage of 853 yen is the lowest among all prefectures.

On the other hand, the management side claimed that the management situation of small and medium-sized companies is severe as they have been unable to pass on higher personnel and other costs to prices.

In March, Prime Minister Fumio Kishida called on the minimum wages council to hold “serious discussions this year, including on achieving 1,000 yen in the nationwide weighted average.” This call was reflected in the government’s basic economic and fiscal policy guidelines, adopted at a cabinet meeting in June.

Since fiscal 2016, the weighted average minimum hourly wage in Japan has increased by more than 3 pct every year, except for fiscal 2020, when COVID-19 began to spread.

The nationwide weighted average of 1,002 yen in fiscal 2023 would represent a rise of over 25 pct from the fiscal 2015 level of 798 yen.

However, Japan still lags behind other major countries in terms of minimum wages.

According to the Japan Institute for Labor Policy and Training, the minimum hourly wage stands at 12 euros, or about 1,830 yen, in Germany, and 11.52 euros, or about 1,760 yen, in France.

In the United States, the federal government-set minimum is 7.25 dollars, or about 1,010 yen, but San Francisco, for example, has a higher figure of 18.07 dollars, or about 2,520 yen.

JIJI Press