The Abe administration's plan to increase the legal minimum hourly wage by 3 percent each year so that the national average — ¥798 this year — will reach ¥1,000 around 2020 is a well-intentioned policy. Along with steadily implementing the plan, the government needs to make sure the move won't jeopardize employment or hurt the finances of small and medium-size businesses.
Japan's legal minimum wage remains well below the levels guaranteed in many other advanced economies. The level is determined in each of the 47 prefectures based on a national guideline, and a steep and widening gap exists between the highest — ¥907 in Tokyo — and the lowest, ¥693, in such prefectures as Okinawa and Kochi. Previously, the minimum wage in some prefectures was so low that workers at that pay level earned even less than people on welfare — a situation that was corrected across the nation with a hike last year but not significantly enough to eliminate the still widespread problem of the working poor in this country.
Along with its repeated urging that major companies turn their increased profits into higher wages for their employees, the administration of Prime Minister Shinzo Abe has been pushing to raise the legal minimum wage, the guideline for which is determined each year by a government panel of experts comprising representatives from business circles and labor organizations. While the nation's major firms offered an average 2.38 percent raise for their workers this year — the sharpest in 17 years — and the average minimum wage was hiked by a record 2.3 percent, it was still short of the 3 percent hike as targeted by Abe.