Rising Prices, Labor Shortages
Japan’s nationwide average minimum wage has surpassed 1,000 yen (9,241 won or US$6.88) per hour for the first time. It is analyzed that local governments have implemented larger increases than expected as rising prices overlapped with labor shortages.
According to reports from Nihon Keizai Shimbun and others on Aug. 20, Japan’s Ministry of Health, Labour, and Welfare (MHLW) has announced that the hourly minimum wage for this year has been determined at 1,004 yen, an increase of 43 yen compared to the previous year. This rate will be applied sequentially in 47 prefectures, or metropolitan areas, starting from October, calculated as a weighted average of the minimum wage.
Despite a significant increase, the influence of the weaker yen means that Japan’s minimum wage is still lower by about 600 won compared to the minimum wage planned for next year in South Korea of 9,860 won per hour. South Korea surpassed Japan in the minimum wage for the first time in history last year due to the exchange rate. If the current trend continues, South Korea will outpace Japan for a second consecutive year.
Previously, the Japanese government set a goal to raise the hourly minimum wage to over 1,000 yen for the first time this year, and the Central Minimum Wage Commission of the MHLW proposed increasing the nationwide average hourly wage to 1,002 yen on July 28. This proposal attracted attention as the largest increase since the introduction of the current minimum wage adjustment system in 2002.
Japanese media have assessed the significant increase in the minimum wage against the backdrop of high prices and a shortage of labor as measures to prevent labor outflow. Among the metropolitan areas, Tokyo Prefecture has the highest minimum wage this year at 1,113 yen per hour. The lowest minimum wage among the metropolitan areas is in Iwate Prefecture in the Tohoku region at 893 yen per hour. Iwate Prefecture is known for being featured as the final door in the Japanese anime “Suzume.”