“Japan Plans Record Hike in Minimum Wage NHK Reports”, “A panel at Japan’s labor ministry has approved a significant 5% increase in the national average minimum wage to ¥1,054 (US$6.85) per hour for the fiscal year, marking the largest hike ever recorded, according to public broadcaster NHK’s report on Wednesday (Jul 24).”
Achievement of sustainable inflation and strong wage growth are seen as prerequisites for the Bank of Japan (BOJ) to raise interest rates from current near-zero levels.
“Increasing the legally binding minimum wage could enhance households’ purchasing power while potentially squeezing profits at struggling small firms.”
“After the decision, labor and business representatives will convene in August to negotiate pay increases, considering the economic conditions in each prefecture.”
The new minimum pay would be implemented by each prefecture from October.
The government has set a new target of bringing minimum wages to ¥1,500 by the mid-2030s.
In response to rising living costs and labour shortages, major Japanese companies have offered pay rises of 5.1 per cent this year, the biggest in more than three decades.
