Japan’s Minimum Hourly Wage Set For Record ¥50 Hike In Major Boost

Japan's average hourly minimum wage is set to rise by another record amount as the government endeavors to support households in the face of persistent inflation and works to boost economic growth with wage-driven stimulus, Kazuaki Nagata reported for Jiji Press.

The boost in pay comes as inflation has outpaced wage growth for a record 26 straight months through May.

A panel tasked with setting a minimum wage target has agreed to a national average increase of ¥50 ($0.30), the fourth record increase in as many years.

Based on the target figure, each prefecture will determine how much it will raise its local minimum wage later this year. The current national average is ¥1,004, meaning it is set to increase by about 5% to just above ¥1,050.

The boost in pay comes as inflation has outpaced wage growth for a record 26 straight months through May, and as families find it increasingly difficult to make ends meet, Japan Times also reported.

A period of dramatic weakness in the yen has only added to the problem, with the high price of imported goods further squeezing household budgets.

"Upward pressure on wages continues to be strong,” Shinichiro Kobayashi, a senior economist at Mitsubishi UFJ Research & Consulting, said, citing labor shortages and sticky inflation.

"It has become tough to attract workers unless they pay more than the minimum wage level.”

The 5.1% increase in wages negotiated during the spring offensive, which is mainly for larger companies but sets the tone for bargaining throughout the country, appeared to have been weighed heavily during the panel's discussions, Kobayashi said.