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 set a guideline for raising the minimum wage for the current fiscal year, representing the largest year-on-year increase on record.

But given the soaring prices of goods, we believe it could have been raised more. As it is, the minimum wage level is still below that of other industrialized countries.

We believe further efforts are needed to improve the overall environment and raise wage levels.

A subcommittee of the labor ministry’s Central Minimum Wages Council on Aug. 2 recommended raising the nationally weighted average of the minimum wage by 31 yen (24 U.S. cents), or a 3.3-percent increase, to 961 yen an hour.

The minimum wage has been raised annually since the Abe administration set a goal of “the nationally weighted average of 1,000 yen,” except in fiscal 2020, when the impact of the novel coronavirus pandemic was particularly severe.

The guideline for the last fiscal year was 3.1 percent.

However, the economic situation has changed greatly since then.

A year ago, the consumer price index was in negative territory. It now exceeds 2 percent. Among other items, prices of food and energy, which impact household budgets, are rising sharply.

The subcommittee’s discussions focused on the impact of the rising prices and concluded that workers’ living expenses must be taken into account in setting the guideline.

This makes us wonder whether it is sufficient to raise the level by slightly more than last fiscal year’s guideline.

At the new level, the annual income based on a 40-hour work week at the minimum wage will still be below 2 million yen. We must not forget that conditions in Japan continue to compare poorly with the rest of the industrialized world.

Based on the guideline, every prefecture will decide their own minimum wage amount at their local councils.

In the process, we hope each prefecture will take their local needs into consideration and aim for a figure exceeding the panel’s recommendation.

The subcommittee pointed out the financial difficulties encountered by businesses due to the rising costs of materials, along with other factors.

An urgent task is to protect subcontractors from being forced into transactions at unfair prices. It is also necessary to improve the effectiveness of support programs for small and midsize businesses that are raising workers’ wages or improving their productivity.

Addressing regional disparities is another task.

The minimum wage will top 1,000 yen only in Tokyo and Kanagawa and Osaka prefectures, even if it is raised in accordance with the new guideline. For nearly 60 percent of the prefectures, the figure will be in the 800-yen-plus range.

It has been pointed out that regional disparities cause a labor drain from regional areas to the big cities.

From the standpoint of guaranteeing the livelihoods of workers, we strongly urge that the minimum wage be raised quickly in low-level areas.

We urge the subcommittee to keep discussing how best to proceed.

In this year’s discussions on the guideline, the government did not indicate a specific target.

Employers, employees and academics are represented on the subcommittee. Until last year, the government took the initiative on recommended increases but this led to growing discontent that the panel’s discussions were not being taken seriously.

Any excessive interference with the subcommittee is undesirable On the other hand, an insufficient minimum wage hike only serves to hinder a more effective distribution policy.

The administration must once again squarely face the reality of a stalled wage hike despite high corporate earnings coupled with the labor shortage, two factors contributing to higher wages.

--The Asahi Shimbun, Aug. 3

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