Minimum wage of this fiscal year and overview of Japan's minimum wages

Japan's minimum wage system was established based on the Minimum
Wage Law. Under this system, the government determines each year the
wages which enterprise owners must minimally guarantee in order to raise
the working conditions of low-wage workers, and to ensure the stability
of their lives. Minimum wages come in two types: region-specific minimum
wages set up by each region, and industry-specific minimum wages that
apply to laborers working in specific industries.

As for region-specific minimum wages, the Central Minimum Wages
Council has since 1978 been conducting yearly fact-finding surveys on
workers' wages. Based on the findings, the Council indicates a rough
standard/criteria for revising the wages so as to make the wage level
more or less unified throughout Japan.

In July, the Council submitted a report to the Minister, advising
that, for FY2002, wages should basically be maintained at the current
level, and that it would be appropriate not to indicate any wage revision
standard/criteria.

The report reflects the worsening employment and unemployment
conditions that seem to linger on. It also placed importance on the
findings of a fact-finding survey on salaries provided in the private
sector, in which about 60% of the companies either did not raise
workers' wages or actually reduced them. It is the first time that
the Council has released a report recommending a virtual zero-wage hike.

Last year's wage hike rate which the Council had released as their
criterion was 0.68%, an all-time low. In response, Council members
representing labor (such as Rengo officials) insisted that, with the
share which part-time workers account for in total employment continuing
to increase, raising the minimum wage was important to support the
unstable wages of these part-time workers and to help out in case
unfair wage differences exist. Meanwhile, Council members representing
the employer side (such as the Japan Business Federation) insisted
that wage reduction was appropriate. As can be seen, a large gap in
views existed between the labor and the management, and consequently,
this year's report shows the views of neutral, public interest Council
members such as those from the academic community.

With the release of this report, the Regional Minimum Wages Council,
for its part, will report on the minimum wages of various regions
(by taking into consideration the various regions' commodity price
levels). Ultimately, directors of various regions' Labor Bureaus will
determine the minimum wage which will be put into force beginning
October.

With the domestic economy continuing its deflationary trend, a
growing number of convenience stores and fast food chains are moving
to suppress the hourly wages of their part-time and other workers.
It remains to be seen what influence the deferment of the raising of
minimum wages will have on non-regular workers.