Amid inflation, Japanese government panel proposes record ¥63 minimum wage hike

Japan Times

6 days ago

A government panel has recommended a record hike of ¥63, or 6%, for the average minimum hourly wage in the country for fiscal 2025, up from the previous year's proposal of a ¥50 increase.
The recommendation made Monday by the Central Minimum Wages Council, which advises the labor minister, would raise the average minimum wage to ¥1,118 per hour, with hourly pay likely exceeding ¥1,000 in all 47 prefectures. The recommended hike reflects the rising prices of rice and other goods.
Based on the proposal, the prefectures' individual councils will make their own decisions, and the new wages will apply from early October.
To compile the latest minimum wage proposal, the government council sorted the 47 prefectures into three groups based on their economic strength.
It set the proposed hike at ¥63 for group A, which includes Tokyo, Osaka and four other prefectures, while group B consists of 28 prefectures, including Hokkaido, Fukushima, Ishikawa and Hyogo.
Despite having weaker economies than the other two groups, group C, made up of the remaining 13 prefectures, was advised to implement a ¥64 wage increase in an effort to rectify wage differences with other regions and address serious labor shortages. Among the 13 are Aomori, Iwate, Kochi and Kagoshima.
If the prefectural councils implement hikes as recommended by the central government council, all 31 prefectures whose minimum hourly wages are below ¥1,000 would see the floor wage exceed the level.
The central government council raised concerns about the rising prices of goods and services, which are weighing on household finances. According to the nation's consumer price data, food prices surged an average of 6.4% year on year in the period between October 2024 and June 2025. Prices of goods and services purchased about once a month, including electricity bills, went up 6.7%.
The council's decision also reflected the pay hikes agreed to in this year's labor-management wage negotiations.
A subcommittee of the council held a total of seven meetings to discuss the fiscal 2025 minimum wage recommendation, the first time in 44 years that so many meetings have taken place, as it coordinated the exchange of views between the labor and management sides.
The council's latest proposal, however, fell short of the 7.3% annual increase needed for the central government to achieve its target of raising the nation's minimum hourly wage to ¥1,500 on average in the 2020s.
The government has been providing support, including subsidies, to prefectures implementing hikes beyond the council's recommendations.
"We'll continue to take every possible measure to support management reform and wage hikes, including at small companies and micro-businesses," Prime Minister Shigeru Ishiba told reporters Monday after the panel meeting.
"The basic idea that wage hikes are the cornerstone of a growth strategy and related efforts are spreading steadily and bearing fruit," Ishiba said.
He also said that the government will intensively support prefectures that conduct wage increases surpassing the levels recommended by the central council.
"We are determined to make further efforts," Ishiba said in reference to the ¥1,500 goal. "The target can be attained once our measures yield positive results."