Photo/Illutration The subcommittee of the labor ministry’s Central Minimum Wages Council holds a meeting in Tokyo on Aug. 1. (Kentaro Uechi)

A labor ministry advisory panel recommended raising the minimum hourly wage by 31 yen (24 U.S. cents) to 961 yen for the largest increase on record.

The Central Minimum Wages Council’s subcommittee of the ministry pitched the 3.3 percent hike Aug. 1 after taking into account the impact of price rises on households.

The subcommittee members consist of representatives from trade unions, employers and academics who are appointed to represent public interest.

The subcommittee establishes minimum wage guidelines for four groups of prefectures, Grouped A to D, depending on their economic situations.

This year, the subcommittee members recommended a 30-to-31-yen rise for the groups.

Each prefectural government will decide the minimum wage raise for their prefectures based on the guidelines.

After that, new minimum wage will be introduced in each prefecture in around October.

The minimum wage has been raised by around 3 percent in recent years, partly as a result of government pressure.

The rise in the consumer price index is mainly due to soaring costs for food and energy as a result of the war in Ukraine.

The general consumer price index, which is used to calculate real wages, has risen by around 3 percent year on year for three consecutive months. The index excludes something calld “imputed rent from owner-occupied dwellings.”

Subcommittee members representing labor unions argued that the minimum wage should be higher in light of rising prices, as shown by the index.

Businesses are also hit hard by rising costs of raw materials.

The domestic corporate goods price index, an index of prices sold and bought between companies, has risen by more than 9 percent year on year since the beginning of this year.

The subcommittee members representing employers have said the minimum wage rise should be modest, arguing small- or midsized subcontractors are not able to pass on an increase in costs to product prices.

The subcommittee members were expected to decide on the guideline at a meeting on July 25, but suspended their discussions that evening due to a wide gap in arguments between members from labor unions and those from employers.

They finally agreed on the guideline at a meeting on Aug. 1, after the subcommittee members did some fine-tuning behind closed doors.

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