Japan Govt Panel Proposes 55-Yen Minimum Wage Hike

Tokyo, July 29 (Jiji Press)–A Japanese government panel on Tuesday recommended an increase of 55 yen, or 4.9 pct, on average in the minimum hourly wage in Japan for fiscal 2026. If the recommendation by the Central Minimum Wages Council, which advises the labor minister, is implemented, the average minimum wage will rise to 1,176 yen per hour from the current 1,121 yen. The recommended hike was smaller than a record increase of 63 yen for fiscal 2025, reflecting a slowdown in the pace of inflation in the country, although prices have continued to rise. Minimum wages, which represent the minimum amount of pay employers are required to provide to workers, including part-time employees, are revised every fiscal year based on living costs, wage trends and companies’ abilities to pay. Prefectural councils determine their respective minimum wage levels based on the central council’s recommendation. The central council divided the country’s 47 prefectures into three groups based on their economic strength and proposed recommended wage increases for each group. For group A, which comprises six relatively affluent prefectures, including Tokyo and Osaka, the council proposed a minimum wage hike of 54 yen. For groups B and C, comprising 28 and 13 prefectures, respectively, it proposed 56-yen increases, exceeding that for Group A in an effort to narrow regional wage disparities and address labor shortages in rural areas. Meanwhile, the proposed hikes for all three groups were lower than last year’s increases of 63 yen for group A and B and 64 yen for group C. The latest recommendation reflected a slowdown in the year-on-year increase in Japan’s consumer price index excluding imputed rent, one of the key factors considered in discussions on minimum wage revisions. The index rose by an average of 2.1 pct between October last year and June this year, compared with a 3.9 pct increase a year earlier. Slower price increases for food and other daily necessities also influenced the latest deliberations on the minimum wage. In earlier discussions, the labor side proposed a 75-yen minimum wage increase, significantly higher than the previous fiscal year. The management side, meanwhile, argued that the business environment, especially for small and medium-sized companies, has deteriorated due to soaring raw material costs amid tensions in the Middle East. They urged the labor side to take companies’ financial conditions into account, noting that some companies are struggling to pass on higher costs to product prices. Due to differences between labor and management, a subcommittee of the council, originally scheduled to hold four sessions to revise the recommended minimum wage levels, ultimately held two additional sessions. END [Copyright The Jiji Press, Ltd.]