Japan's prefectures push for minimum wage increase above national standards

Most of Japan’s prefectures that have submitted their minimum hourly wage plans are pushing for increases exceeding the already record-high wage hike proposed by the labour ministry, citing inflation and decline of real incomes in the country.

21 of the 28 prefectures that have submitted their decisions on August 21 have opted for increases higher than the initial government recommendation, according to a report from the Asahi Shimbun. 

Each of Japan’s 47 prefectures has its own fixed minimum wage, although the Ministry of Health, Labour and Welfare recommends the national target average. Earlier this year, a ministry panel recommended an average increase of ¥63 ($0.43), which would make the minimum wage in all of Japan’s prefectures exceed the ¥1,000 ($6.76) for the first time in its history.

The council from Wakayama, one of Japan’s rapidly aging prefectures, have agreed on a ¥65 ($.044) increase in its hourly minimum wage, while another from Tottori prefecture, the country’s least populous with fewer than 600,000 citizens, recommended a ¥73 ($0.49) increase that will bring its minimum wage to ¥1,030 ($6.97), Asahi reported.

Minimum wage increases have been a hot-button agenda for the administration of Prime Minister Shigeru Ishiba, who is proposing to raise the minimum wage to a nationwide average of ¥1,500 ($10.14) by 2029. 

The prime minister stressed the importance of raising wages to help households make ends meet as Japan’s inflation remains high at above 3%.

The push to increase the minimum wage has also been met with concerns from small and midsize businesses, who might not be able to keep up.

Ken Kobayashi, head of the Japan Chamber of Commerce and Industry (JCCI), said that complying with the government’s proposed wage increase would be ‘extremely difficult’ for smaller companies.

“As prices and wages continue to rise, there is no objection to raising minimum wages, but the issue is the magnitude and pace of the increase,” Kobayashi told The Japan Times.

According to a JCCI survey held in March, nearly 20% of small businesses said it would be ‘impossible’ to make the increases needed to meet the government’s wage target, while more than half said it would be ‘difficult’. 

Under the administration of former Prime Minister Fumio Kishida, the Japanese government set a deadline to achieve the ¥1,500 minimum wage goal by the mid-2030s. Ishiba moved the deadline to the end of this decade.