Average Minimum Wage in Japan Set to Exceed ¥1,000 for First Time

A subcommittee of the Central Minimum Wages Council (an advisory body to the minister of Health, Labor, and Welfare) has decided to raise Japan’s weighted average minimum hourly wage by ¥41 in fiscal 2023. This is the largest increase since the current method was adopted of indicating wages on an hourly basis, far exceeding the ¥31 increase the previous fiscal year. Assuming the minimum wage is revised according to this decision it will be the first time for the national average to rise above ¥1,000, to ¥1,002.

The subcommittee’s guidelines divide prefectures into three categories according to their economic conditions. An hourly minimum wage increase of ¥41 was set for the six prefectures in Category A, which includes Tokyo and Osaka, while the 28 prefectures in Category B (including Miyagi, Kyoto, and Hyōgo) were designated for a ¥40 increase and the 13 prefectures in Category C (including Aomori and Okinawa) for a ¥39 increase. On the basis of the guidelines, the actual amount of the increase will be decided by the council for each prefecture, with the new minimum wages coming into effect around October 2023.

At a conference of representatives of government, labor, and management held at his official residence in March, Prime Minister Kishida Fumio stated that, “Raising wages is a the most important task for the creation of new capitalism so I hope to see serious discussions that include raising the minimum wage to ¥1,000.” The fundamental policy for economic and fiscal management also clearly indicates the need for discussions that include the possibility of raising the minimum wage to ¥1,000, so the recent decision made by the subcommittee coincides with the government’s aims. However, some have pointed out that medium-size and smaller companies may find it difficult to offset the increase in labor costs by raising prices, resulting in a heavy burden on company operations.

The minimum wage in Japan only exceeds ¥1,000 in 8 prefectures (Tokyo at ¥1,113, Kanagawa at ¥1,112, Saitama at ¥1,028, Chiba at ¥1,025, Aichi at ¥1,027, Kyoto at ¥1,008, Osaka at ¥1,064, and Hyōgo at 1,000), while it is more than ¥950 in some nearby prefectures. On the other hand, there are 17 prefectures—mainly located in Tōhoku, Kyūshū, and Shikoku—where the minimum wage remains less than ¥900.

(Translated from Japanese. Banner © Pixta.)