Zero wage hike reported as the minimum wage revision standard/criteria

In our JLF issue a year ago (Vol. 25, Special Issue), we described how the Central Minimum Wages Council decided against indicating any wage revision standard/criteria, and provided a brief explanation of Japan's minimum wage system.

A report for this fiscal year was submitted to the Minister of Health, Labour and Welfare in late July, and indicated a wage revision standard/criteria of "zero yen."

This year, Council members representing the employer side strongly emphasised that the time has come not only to maintain the existing minimum wage level but also to demonstrate criteria for lowering it. The reasons were that a survey on the status of wage revision showed that the wage increase ratio marked a downturn into negative territory for the first time ever, and that over 60% of all the business offices did not implement wage revisions. Moreover, in the manufacturing sector minus figures were recorded in 68.6% of all companies in addition to the fact that there was an increase in the number of offices that lowered employee wage levels.

Meanwhile, Council members representing labor emphasised equally strongly that the level of minimum wages be raised. They asserted that visibly improving the wage levels would stimulate consumer psychology and would therefore be effective in reviving the Japanese economy and halting the further drop in wage declines. They also pointed out that the impact ratio of Japan's legally stipulated minimum wage was substantially lower than that of other developed countries. Moreover, the members stated that, with the current region-specific minimum wages, an individual would earn only about 115,500 yen per month (nationwide weighted average) even if they worked up to the maximum legal working hours, and indicated that this amount was at a drastically low level even when compared with the female part-time workers' average hourly wage of 891 yen, the average starting salary for female high school graduates workers of 148,700 yen, and the minimum necessary monthly living expenses of unmarried workers (as calculated by the Japanese Trade Union Confederation or Rengo) of 148,000 yen.

Given that labor and management sides could not find common ground in their assertions, the final report adopted the views of neutral, public interest Council members. From now on, this report will serve as a source of reference for the Regional Minimum Wages Councils in their deliberations on revising the monetary amount.