Photo/Illutration The labor ministry’s Central Minimum Wages Council holds a meeting on July 23 in Tokyo. (Junichi Miyagawa)

The government is in the final stages of raising Japan’s minimum wage for fiscal 2024 by 50 yen, or 5 percent, to 1,054 yen ($6.80) per hour, the highest-ever national weighted average.

The labor ministry’s Central Minimum Wages Council has likely concluded that a substantial wage increase is necessary in the face of prolonged high prices and will formalize the plan soon, sources said.

The council, which consists of experts representing labor, management and the public interest, divides prefectures into three ranks and provides a guideline for minimum wage increases each year.

Local councils in each prefecture then determine the minimum wage based on this guideline.

In fiscal 2023, the national weighted average increased by a record 43 yen, or 4.5 percent, to 1,004 yen, exceeding 1,000 yen for the first time.

At this fiscal year’s council, labor representatives called for a greater increase in the minimum wage than last year.

That was because the average wage increase, including regular salary increases, for regular employees in this year’s “shunto” spring wage negotiations was a historically high 5.10 percent, according to data compiled by Rengo (Japanese Trade Union Confederation).

On the other hand, while the management side showed understanding for some increase in the minimum wage, it has been cautious about large increases, citing that some small and midsize companies would be unable to fully pass on the increase in their prices.

Real wages, after subtracting the impact of price hikes, had remained negative for 26 consecutive months until May.

In light of this, the central government has set a goal of achieving a minimum wage of 1,500 yen by the mid-2030s and as soon as possible.

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