Japan’s minimum wage hike talks enter final stage

JIJI

Labor and management remain far apart on a minimum wage hike for fiscal 2014 as a labor ministry panel entered the final stages of discussions Monday.

At a subcommittee of the Central Minimum Wages Council, representatives of labor and management are battling over whether to recommend a wage increase larger than the previous year’s ¥15.

No quick end to the discussions is expected as the sides don’t appear close to agreement.

The minimum wage for fiscal 2013 was increased by ¥15 to ¥764 an hour on average.

Tokyo had the highest minimum wage, at ¥869, while Okinawa, Saga and Miyazaki were among the lowest at ¥664.

This year, corporate earnings have improved thanks to the economic recovery, while labor shortages have become more evident.

The Abe administration, which included increases in the minimum wage in its revised growth strategy released in June, hopes to see a hike similar to or bigger than the previous year’s, labor minister Norihisa Tamura has said.

Labor negotiators have demanded a minimum wage increase much larger than ¥15. They cite an erosion in real income due to the consumption tax hike in April and rising consumer prices, as well as wage hikes agreed to in this spring’s “shunto” annual wage negotiations.

Management wants a smaller hike, believed to be around ¥8 to ¥9, due to unfavorable business conditions for small and medium-size businesses.

The subcommittee is also expected to discuss how to resolve the disparity between minimum wages and welfare benefits. Currently, the minimum wage is lower than welfare benefits in five of the 47 prefectures, creating a disincentive for people on welfare to find work.

After the council proposes a rough target of an upward revision to minimum wages, local panels will flesh out actual minimum wage levels. The new minimum wages will come into effect in October.