Discussion in a labor ministry panel on raising the minimum wage in Japan is approaching its final stages. The move would mark the second time since the outbreak of the coronavirus in 2020 for the minimum wage to be revised.
From fiscal 2016, the minimum wage had been raised by at least 3% for four consecutive years. But due to the effects of the coronavirus last year, the national average was raised by just 1 yen to reach a weighted average of 902 yen (about $8.19) per hour.
The role of a minimum wage is to guarantee an income under which people can live. But at 900 yen an hour, even if a person works a full 40 hours a week, the amount they earn in a year would be under 2 million yen (about $18,160).
By international standards, Japan's minimum wage is low. In Britain, Germany and France, even amid the outbreak of the coronavirus, the minimum wages of those countries have risen by around 1% to 2% a year.
A proper increase in the minimum wage is necessary to ensure that the pay gap between those in regular and nonregular employment does not widen.
In the annual spring labor offensive, in which labor and management in Japan negotiate wages, there has been a trend for wages to increase primarily for regular employees, even under the coronavirus pandemic.
At the same time, many nonregular workers are employed in the restaurant and retailing industries, and for them the effects of an increase in the minimum wage are large. Even during the spread of the coronavirus, workers in these industries have been providing services that are essential for our daily lives. Efforts must be made to provide them with better remuneration.
Disparity between regions is also a problem in Japan. Tokyo has the highest minimum wage in the country, at 1,013 yen (about $9.20) per hour, which is more than 200 yen per hour higher than the minimum wage in some other prefectures, such as Akita. Even when factoring in price differences in those regions, the delay in improvements in regional areas is clear.
The government, which last year adopted a stance of prioritizing job retention over increasing wages, has set a goal of increasing the minimum wage to "an average of 1,000 yen at an earlier stage." Managers, however, are asking for the current level be maintained, on the grounds of worsening earnings. Indeed, the restaurant, accommodation and other industries have seen major declines in demand due to the spread of coronavirus infections. If the minimum wage increases, it will inevitably have an impact on their management.
To enable these industries to raise employees' wages, the government should introduce measures to help improve their performance. It is essential to enhance subsidy programs while listening to the voices of people in the field.
Major companies also have a big role to play. In the manufacturing industry, subcontractors may have to raise the prices of products in some cases to cover wage increases. Consideration should be given to the actual state of affairs.
Precisely because of the downturn caused by the coronavirus crisis, the government must create an environment enabling the minimum wage to be raised. That will help lift Japan's economy.