The Japanese government is in the last stages of boosting the minimum wage for fiscal 2024 by 50 yen, making it 1,054 yen per hour, the greatest national weighted average ever recorded. Sources indicate that the Central Minimum Wages Council, part of the labor ministry, has likely determined that a significant wage increase is essential due to the prolonged high prices and is expected to finalize the plan soon. This council consists of experts from labor, management, and the public interest and categorizes prefectures into three ranks to establish a guideline for annual minimum wage increases. Local councils in each prefecture then use this guideline to decide on the minimum wage raise.
For the fiscal year 2023, the national weighted average surged by a historic 43 yen, reaching 1,004 yen, surpassing the 1,000 yen mark for the first time. During this year's council, labor representatives advocated for a larger minimum wage increase compared to the previous year, influenced by the 5.10 percent increase in the average wage recorded during the spring wage negotiations this year. On the contrary, while management acknowledged the need for some increment in the minimum wage, they expressed reservations towards substantial increases, voicing concerns about how some small and medium-sized companies might struggle to fully absorb the rise in their costs.
Despite acknowledging a need for a raise, management has cited the difficulties some businesses may face in implementing substantial increases due to concerns about the impact on their pricing structure. Real wages, factoring in the effects of price hikes, remained negative for 26 consecutive months up until May, highlighting the importance of addressing these wage issues. To tackle this, the central government has set a target of achieving a minimum wage of 1,500 yen by the mid-2030s and aims to reach this goal as soon as possible.