Japan seeks minimum wage hike as soon as possible

The proposals for higher wages could be reflected in the government’s mid-year policy guidelines, and will provide the basis for its fiscal year budget in 2022.
By: | May 19, 2021
Topics: Compensation and Benefits | Employee Experience | Health and Wellness | Japan | News

Japan aims to raise its minimum wage to ¥1,000 (US$9) an hour as soon as possible, Prime Minister Yoshihide Suga said on Friday at a meeting with his top economic advisory panel.

“We are aiming to bring minimum wages to a national average of ¥1,000 sooner,”  he said, without setting a timeline, reports Reuters. 

The prime minister’s advisers at the Council for Economic and Fiscal Policy called on the pay hikes — which include minimum wages — to boost sustainable growth and prevent poverty among low-paid, non-regular workers. 

The call on higher wages is likely to provoke opposition from smaller firms that are struggling amid the pandemic.

The proposals for higher wages could be reflected in the government’s mid-year policy guidelines, and will provide the basis for its fiscal year budget in 2022, which will be compiled late-December. 

READ: Pandemic dampens Japan PM’s plans to raise minimum wage

With vaccinations, if the economy heads towards normalisation, real GDP is expected to return to pre-pandemic levels as early as autumn, the advisers said. 

Minimum wages in the country had risen 3% on average a year, from fiscal year 2017 to 2019, but stopped in 2020 as companies tightened their belts due to COVID-19.