Japan’s ministry of labor on Friday, August 21, announced that the minimum hourly wage will increase by ¥1 from the previous year to ¥902 on average in fiscal 2020.
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The amount of the average hike has dropped to its lowest in 16 years after growing by over ¥20 annually for four consecutive years until fiscal 2019, which ended back in April.
Workers in Japan to Expect Minimum Hourly Wage Increase by JPY 1 Amid Coronavirus Pandemic
In line with this, the Central Minimum Wages Council, which advises the labor minister, has aired its recommendation to keep the minimum wage unchanged, citing the economic challenges from the coronavirus pandemic, the Japan Times reported.
Based on the current situation, experts say that more time is required to achieve the government’s goal of creating a well-sustained economic cycle by raising the minimum wage and spurring consumption.
The report noted that 85% (40 of the 47) of the prefectures implemented hikes of up to JPY 3 to narrow regional wage gaps. Nine, including Kagoshima, Ehime, and Aomori, raised their minimum wages by JPY 3.
Eight out of these nine prefectures recorded the lowest minimum hourly wage in fiscal 2019.
The minimum wage will go up by JPY 2 in 14 prefectures and by JPY 1 in 17 prefectures.
Despite the current economic challenges, some prefectural governments have raised wages to prevent workforce outflows according to the labor ministry.
Seven prefectures including Tokyo, which already had the highest minimum wage at JPY 1,013, maintained its current wage levels.
Meanwhile, seven prefectures, including Akita, Tottori, Kochi, Saga and, Okinawa, will have each follow the lowest minimum wage scheme of JPY 792.
Furthermore, the labor ministry noted that the gap between the highest and lowest minimum salaries offered per prefecture will shrink by JPY 2 to JPY 221.
The ministry of labor said that the new minimum wage scheme will take effect on October 1 or later.