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2018.04.06

【Aging, safety net and fiscal crisis in Japan】No.92: Minimum Wage is Rising Steadily

In this column series, Yukihiro Matsuyama, Research Director at CIGS introduces the latest information about aging, safety net and fiscal crisis in Japan with data of international comparison.

One of the achievements of Abe administration's economic policy has been raising the minimum wage. The minimum wage is a system whereby a country establishes the minimum amount of wages according to the rule of law, and employers must pay workers an amount at least equal to the minimum wage. There are two minimum wages: regional minimum wage and specific industry minimum wage. The former is the minimum wage system applicable to all workers and their employers in each prefecture regardless of industry or occupation and is defined for all 47 prefectures. The latter is set for industries in which concerned labor and management decide a higher remuneration than regional minimum wage, and there are 223 specific industry minimum wages as of April 2017.

As shown in Figure 1, the national average of regional minimum wage has increased 1.23 times from 687 yen in 2007 to 848 yen in 2017. Since the consumer price index in the same period has increased by only 1.03 times, the increase in minimum wage seems to be helpful in meeting living expenses for people working at low wages.


Figure 1 The national average of regional minimum wage

180329_matsuyama_fig04.png

(Source)Ministry of Internal Affairs and Communications

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