More Japan employers open to minimum wage hike

SMEs have now indicated a willingness to accept the government’s decision on minimum wage increases due to a serious labour shortage and rising prices.
By: | May 13, 2022

Many companies had been reluctant to accept the wage-hike policy due to the financial burden involved. Related parties are paying close attention to whether the trend for receptivity to minimum wage hikes will lead to an increase in wage levels across the board in Japan.

Three organisations representing small and midsize companies – the Japan Chamber of Commerce and Industry (JCCI), the Central Federation of Societies of Commerce and Industry, and the National Federation of Small Business Associations – jointly submitted a minimum wage-related request late last month to the government.

For fiscal 2021, the three entities requested that the government “maintain the current level” when setting the minimum wage, but the latest request did not include that phrase. As such, they showed a tacit compliance with the wage hikes.

“Prices are rising, and some companies have already raised wages. The situation has changed,” said JCCI chairman Akio Mimura.

READ: Firms in Japan adopt flexible working arrangements

In a nationwide survey of small and mid-sized businesses conducted by the JCCI and another organisation in February, 41.7% of businesses said minimum wages should be increased in fiscal 2022, up by 13.6 percentage points from the previous year.

This figure was larger than the combined percentage of businesses which responded with “the current level should be maintained” and “minimum wages should be decreased”, at 39.9%, according to The Phnom Penh Post.