Minimum Wage Levels and Livelihood Protection

Minister of Health, Labour and Welfare Hakuo Yanagisawa announced at a Cabinet meeting that labor standards inspection offices across the country will conduct simultaneous check-ups of 10,000 business establishments within a month starting on June 1. The check-ups aim to secure proper compliance with minimum wage regulations and to familiarize establishments with the regulations.

The bill on the revised Minimum Wage Law that is currently before the Diet includes a collateral clause requiring Prefectures to "take into account consistency with the protection of livelihoods" when determining minimum wage levels. (See "Public Policies" in issue No. 81 of the Japan Labor Flash.) The statutory minimum wage is reviewed every summer by a council in which representatives of labor and management participate, and is revised in October each year. However, the Ministry of Health, Labour and Welfare has decided to require 11 Prefectures where the amount of welfare benefit payments exceeds legally defined minimum wage levels to raise their minimum wage. While the margin of hikes has been less than 10 yen (on an hourly basis) every year so far, the latest hike, according to an estimate by the Ministry, will be 49 yen on the basis of a weighted average. Since it is widely believed that the capability of small and medium-sized enterprises to make payments is nearing the limit, the latest revision will inevitably prove controversial.

First of all, the Constitution of Japan stipulates in Article 25 that "all people shall have the right to maintain the minimum standards of wholesome and cultured living..." and that "in all spheres of life, the State shall use its endeavors for the promotion and extension of social welfare and security, and of public health." Based on this principle, the Public Assistance Law was enacted in 1950 in order to "provide all people having difficulty making a living with necessary protection according to the degree of their difficulties, guarantee a minimum wage for their livelihood, and encourage self-reliance."

The fact that few people on welfare have a job, and that people working at minimum wage levels have lower incomes than those on welfare, are problematic in terms of incentives to work. Even so, it is also true that minimum wage levels in Japan are fairly low compared to those in other major developed countries, and that quite a few people who work are paid below the minimum wage. On the other hand, there has been frequent criticism in recent years that approval for welfare benefits is complicated by bureaucratic red tape.

Improvement of these systems to encourage self-reliance among workers has been long awaited, and one hopes that labor and management will thoroughly discuss the issue and reach a realistic conclusion.