A government advisory panel agreed Wednesday to propose raising the average minimum hourly wages for fiscal 2021 by a record ¥28, or 3.1%, from the previous year to ¥930.
The size of increase is the largest since Japan started measuring minimum wages on an hourly basis in fiscal 2002. The previous record increase was the ¥27 marked in fiscal 2019.
The agreement was reached at a meeting of a subcommittee of the Central Minimum Wages Council, which advises the labor minister. The council is composed of representatives from the employer and labor sides, as well as experts who adopt a neutral position.
If the proposal is fully implemented, minimum wages in Akita, Tottori and five other prefectures, currently at the lowest level in the country, would rise to ¥820. This means that minimum wages would be above ¥800 in all prefectures for the first time.
In its new basic economic and fiscal policy guidelines adopted in June, the Japanese government said that it would work on this year’s minimum wage increase in a bid to raise the national average to ¥1,000 as soon as possible.
The subcommittee decided on the record increase apparently with consideration for the wishes of Prime Minister Yoshihide Suga, who pushed to realize a sizable increase in minimum wages, sources familiar with the situation said.
During discussions at the subcommittee, the employer and labor sides failed to narrow their differences. The labor side called for increasing wages, while the employer side sought to maintain current wage levels due to the economic fallout from the novel coronavirus epidemic.
Experts said that the situation for the current fiscal year is not greatly different from those for the four years through fiscal 2019, when the average minimum wages were raised by 3.0% to 3.1%.
The subcommittee usually adopts its proposal on minimum wages unanimously, but two members representing the employer side voted against this year’s proposal.
As the proposal calls for carrying out an increase of ¥28 for all areas across the country, regional wage gaps are set to remain.
Following the subcommittee decision, the council will submit its proposal to labor minister Norihisa Tamura on Friday. New minimum hourly wages will later be set by each prefecture and introduced around October.
Japan’s average minimum wages were raised by some 3% in each of the four years through fiscal 2019, reflecting demands from the administration of then Prime Minister Shinzo Abe.
Amid the novel coronavirus crisis, however, the council stopped short of recommending a wage increase in fiscal 2020, effectively leaving wage levels unchanged year on year.
As a result, the national average minimum wage is currently set at ¥902, up only ¥1 from the previous year.
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