A subcommittee of a labor ministry panel agreed Wednesday to recommend that the country’s minimum hourly wage be raised by ¥18 on average for fiscal 2015, which started in April.
The minimum wage will rise to ¥798 on average if the recommendation by the subcommittee of the Central Minimum Wages Council is implemented.
This is the steepest increase since fiscal 2002, when the country started measuring minimum wages on an hourly basis. The agreement was reached after all-night talks.
Speaking at a news conference, Chief Cabinet Secretary Yoshihide Suga welcomed the recommendation, saying a considerable wage increase can promote economic growth.
The recommendation marks the fourth straight year of double-digit increases in the minimum wage amid strong corporate earnings and labor shortages stemming from the country’s economic recovery.
The council is scheduled to submit the recommendation to Health, Labor and Welfare Minister Yasuhisa Shiozaki on Thursday.
Panels set up by the country’s 47 prefectures will decide their respective minimum wages, based on the recommendation.
Labor unions initially sought an increase of some ¥50 in line with price trends as well as pay increases set in this year’s “shunto” spring labor-management wage talks.
By contrast, employer representatives claimed that an increase in the minimum wage should be limited to around ¥10 as small companies are not financially strong enough to increase salaries further.
The present minimum monthly wage is ¥780 on average after an increase of ¥16 for fiscal 2014. The average wage rose ¥12 in fiscal 2012 and ¥15 in fiscal 2013.
Tokyo tops the prefecture-by-prefecture list of minimum wages, at ¥888, while the lowest is ¥677 in Tottori, Kochi, Nagasaki, Kumamoto, Oita, Miyazaki and Okinawa. For Tokyo, an increase of ¥19 was recommended.
After the fiscal 2014 increase, employee take-home pay based on the minimum wage became higher than welfare benefits in all prefectures.