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Japan Forward
19 hours ago
- Business
- Japan Forward
Minimum Wage Talks: Who's Looking Out for Small Enterprises?
このページを 日本語 で読む The government has decided that in 2025 the minimum wage increase will be the largest on record. New guidelines for the national average minimum wage have been issued by the Central Minimum Wages Council of the Ministry of Health, Labor and Welfare. They call for an increase from the current ¥1,055 to ¥1,118 JPY ($7.14 to $7.57 USD). Such a boost by 6.0% would be the largest ever for the hourly wage. Real wages, allowing for price fluctuations, were negative for six consecutive months through June. It is commendable that the minimum wage guidelines, which impact the hourly wages of part-time and casual workers, have been significantly raised to support the daily lives of workers. But steady increases in wage levels will also be needed from next fiscal year onward, if we are to realize a virtuous economic cycle. Going forward, prefectural councils will make individual decisions on minimum wage levels for their areas based on these guidelines. Remedying regional disparities remains an issue, but if the ¥63 target is met, hourly wages will exceed ¥1,000 ($6.77) in all prefectures for the first time. Then-Keidanren chairman Masakazu Tokura (left) and Rengo president Tomoko Yoshino discuss wages in Tokyo on January 22, 2025. Small and medium-sized enterprises are the most sensitive to the impact of minimum wage hikes. The problem is that they are finding it difficult to make payments. Small and medium-sized enterprises are already spending a high proportion of their limited profits on labor costs. The "labor share of income," which indicates what percentage of profit is spent on labor costs, is in the 30% range for large companies. However, it is in the 70-80% range for small and medium-sized enterprises. In urban areas, the hourly wages paid part-time workers are noticeably higher than the minimum wage. The labor shortage in such areas is serious, and if businesses cannot secure personnel, their very survival is at risk. It is essential that each company make efforts to improve productivity by introducing IT technology so as to generate the capital needed to increase wages. We would like to see the government support investments that lead to increased productivity. It will also be necessary to further strengthen monitoring of transactions with large companies so that increases in raw material and labor costs for smaller companies can be passed on through transaction prices. Raising the minimum wage directly translates into increased take-home pay. It is something the government can claim as an achievement even without having to incur large fiscal outlays. Last fall (2024), Prime Minister Shigeru Ishiba brought forward the government's target date for raising the minimum wage to ¥1,500 ($10.15) from the mid-2030s to sometime before the end of this decade. To achieve this ambitious goal, an increase of more than 7% will be necessary every fiscal year from now onwards. However, it will be up to private companies to actually increase wages. It would be counterproductive if hasty increases in wage levels result in reduced overtime and work shifts, or job insecurity. We urge the government to keep this in mind while striving to create an environment that will lead to steady increases. Author: Editorial Board, The Sankei Shimbun このページを 日本語 で読む
5 days ago
- Business
Japan's Minimum Wages Rise Again
Japan Data The national average of all prefectural minimum wages in Japan is set to rise by ¥63 to ¥1,118, with hourly pay climbing above ¥1,000 in all prefectures. On August 4, a subcommittee of the Central Minimum Wages Council submitted a report to Minister of Health, Labor, and Welfare Fukuoka Takamaro, advising that the minimum wage (on a national average basis) should be raised by a record ¥63 in fiscal 2025. This is significantly higher than the rise of ¥43 in fiscal 2023 and ¥51 in fiscal 2024, and will be the largest increase since the method of indicating wages on an hourly basis was adopted in fiscal 2002. If the increase goes ahead as expected, it will raise the national average hourly minimum wage from ¥1,055 to ¥1,118. The subcommittee's guidelines divide prefectures into three categories according to their economic conditions. An hourly minimum wage increase of ¥63 was set for the six prefectures in Category A, which includes Tokyo and Osaka, and the 28 prefectures in Category B (including Hokkaidō, Hiroshima, and Fukuoka), while it was ¥64 for the 13 prefectures in Category C (including Akita and Okinawa). This was the first time the wage hike was highest in Category C, with the aim of addressing economic disparities, as well as the severe labor shortages in these areas. The council in each prefecture will decide the exact amount of the wage increases based on guidelines; new wage floors will be introduced from around October 2025. The new minimum wage will be ¥1,226 in Tokyo and ¥1,225 in Kanagawa, exceeding ¥1,200 for the first time. It will also be over ¥1,100 in the prefectures of Saitama, Chiba, Aichi, Osaka, Kyoto, and Hyōgo, in Japan's three major metropolitan areas. At its lowest it will be around ¥1,000 to ¥1,050 in a number of prefectures, mainly in Tōhoku, Kyūshū, and Shikoku. Japan's government has set a target of raising the national average minimum wage to ¥1,500 during the 2020s; to achieve this, an annual hike of 7.3% is required. However, there have been difficulties in reaching agreement between labor and management on large raises. In the most recent talks, seven rounds of discussions were needed by the council for the first time in 44 years, and the recommendation fell short of the target level. Prime Minister Ishiba Shigeru has stated that he would like to provide focused support for employers when minimum wages are raised above the government's target level. Data Sources Data on the minimum wage in fiscal 2025 (Japanese) and fiscal 2024 (Japanese) from the Ministry of Health, Labor, and Welfare. (Translated from Japanese: Banner photo © Pixta.)
Japan Times
05-08-2025
- Business
- Japan Times
Amid inflation, Japanese government panel proposes record ¥63 minimum wage hike
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."
Asahi Shimbun
05-08-2025
- Business
- Asahi Shimbun
Minimum wage likely to rise by 6% to 1,118 yen, a record increase
Minimum wages in Japan are likely to rise by at least 6 percent this year, boosting the pay of low-income earners amid rising prices and an increasing cost of living. On Aug. 4, the Central Minimum Wages Council, an advisory panel to the labor ministry, decided to recommend an increase of 63 yen or 6 percent, raising the national hourly minimum wage to 1,118 yen ($7.60) from 1,055 yen at present. The recommendation, which is issued in the form of guidance, surpasses last year's record increase of 50 yen, or 5 percent, and marks the largest hike in Japanese history. Prefectures are not obligated to match the recommendation. However, they may also exceed it, as some did last year. The recommendation came after a meeting the same day by the council's subcommittee, which comprises labor and management representatives as well as scholars as public-interest figures. The minimum wage varies between administrative regions, with employers in Tokyo paying the most, at 1,163 yen, and those in Akita Prefecture paying the least, at 951 yen. If wages rise in line with the guideline, the minimum wage will surpass 1,000 yen in all prefectures for the first time. The Central Minimum Wages Council decides which of three economic categories a prefecture falls under—A , B or C—and issues guidelines specific to that ranking. Tokyo, for example, is in group A. This year, both A and B categories received the same recommendation: a raise of 63 yen. C-ranked prefectures, the economically weaker group, were given a recommended increase of 64 yen. This is the first time the increase for C-ranked areas has exceeded that for A and B ranks. It is seen as a bid to narrow regional gaps in wages. Regional minimum-wage councils will now use these guidelines to determine the actual wage in each prefecture. Revisions will be approved in the fall. Last year, local councils exceeded the central council's guidelines for many prefectures. For example, the increase in the minimum wage of Tokushima Prefecture exceeded the council's guideline by 34 yen. So, the national weighted average minimum wage suggested by the central council may end up higher if local councils decide to move in that direction. During this year's council discussions, labor representatives cited two factors in demanding a significant increase. The first was rising prices, which are being felt nationwide. The second was a strong average base salary hike of 5.25 percent for permanent employees of companies, which was realized in this year's 'shunto' spring wage negotiations. Permanent employees often are not those who receive the minimum wage. Prime Minister Shigeru Ishiba's administration has set a goal of raising the national average minimum wage to 1,500 yen by the end of 2029. To meet this goal, it will need an average annual increase of 7.3 percent. Ryosei Akazawa, the minister for economic revitalization, is in charge of wage increases to meet the 2029 goal. He has been pushing for larger increases in meetings with members of economic organizations. Employer representatives understand the need for wage increases, but they pushed back. They pointed out that companies differ in their abilities to support wage increases, depending on their sizes and industries. After all, the companies themselves are being slammed by higher prices. This resistance meant it was difficult to consider a hike of more than 6 percent. As if to underscore the complicated talks, the subcommittee held seven rounds of talks to decide the guidance, the most since 1981. The central council examined data such as the 6.4 percent year-on-year increase in the consumer price index for food, which is an average from October 2024 to June 2025. It also reviewed the 6.7 percent increase for items typically purchased about once a month. Both figures were used to try to persuade the employers' representatives. Ultimately, the guideline was finalized with an emphasis on the pain that low-income earners experience when essential goods cost more.
04-08-2025
- Business
Japan Govt Panel Proposes Record 63-Yen Minimum Wage Hike
News from Japan Society Aug 4, 2025 23:01 (JST) Tokyo, Aug. 4 (Jiji Press)--A Japanese government panel recommended on Monday a hike of 63 yen, or 6.0 pct, in the average minimum hourly wage in the country for fiscal 2025, up from the previous year's proposal of a 50-yen increase and marking a record size. The recommendation by a subcommittee of the Central Minimum Wages Council, which advises the labor minister, would raise the average minimum wage to 1,118 yen per hour, with bottom-line pay likely exceeding 1,000 yen in all 47 prefectures of the country based on the proposal. The recommended hike reflects rising prices of rice and other goods. Based on the proposal, the prefectures' minimum wages 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, depending on their economic strengths. It set the proposed hike at 63 yen for group A, which includes Tokyo and five other prefectures such as Osaka, and group B, consisting of 28 prefectures such as Hokkaido, Fukushima, Ishikawa and Hyogo. [Copyright The Jiji Press, Ltd.] Jiji Press
