The new minimum wage level for each of the nation's 47 prefectures has been formally adopted and will take effect in October. The average margin of the year-on-year rise was the highest since the current method for setting the rates was adopted in 2002. It is hoped that the higher minimum wages will help improve the livelihood of workers at or near the bottom of the labor force in terms of compensation. The latest revisions also expose a widening regional wage gap — a problem that could exacerbate the population exodus to metropolitan areas.
In the fiscal 2015 revisions of hourly minimum wages, the national average went up by ¥18 to reach ¥798, higher than the ¥16 raise in fiscal 2014 and marking a two-digit increase for the fourth-straight year. The minimum wage varies from prefecture to prefecture and will be ¥16 to ¥20 higher from the previous year. In Tokyo and Kanagawa, the hourly minimum wage will top ¥900 for the first time.
With major companies earning record profits under the Abe administration's economic policies, their workers have been awarded wage hikes topping 2 percent for the second year in a row. Still, such wage hikes have not taken place in many small and medium-sized companies, especially those outside the metropolitan areas, where "Abenomics" had the biggest impact. In view of this situation, raising the minimum wages is necessary to achieve broad-based pay increases, which should in turn help expand consumer spending.