Japan raises the minimum wage for third consecutive year
Thursday, August 2, 2018
The hourly salary will climb again next October
Winds of change are blowing through the Japanese labor laws. The country is fighting against the severe workforce shortage with their best strategies: easing the language requirements, creating new visa categories and now, raising the minimum hourly wage. The salaries underwent the biggest growth ever since the records started to be kept in 2002. The main purpose of these measures is to deal with the lack of workers, especially foreign talent. The regulation is expected to come into force in October, then the wage for all workers within Japan must be at or above the minimum.
In order to determine the new wage benchmarks, Japan’s 47 prefectures have been ranked from A to D depending on economic and social factors. The suggested wage raises are different for each category:
- Group A (Tokyo and Osaka are included here) is called on to raise the minimum wage by 27 yen.
- Prefectures under B category (Kyoto and Hiroshima belong to this group) could encounter a 26 yen-lift.
- C-ranked prefectures (such as Hokkaido or Fukuoka) are presumed to receive an increase of 25 yen.
- The rate within the D group (for example, Aomori and Okinawa) would grow by 23 yen.
While workers are going to see how their income slightly increases, companies are on the other side of the coin. They will have to restructure processes and become more productive in order to keep on a budget. The salary wage will be more tricky to manage in small or medium businesses, which will have to do an additional effort to obey the regulations.
Japanese hourly wages have increased steadily for the last 3 years. Most employees in large urban areas such as Tokyo, Osaka, or Nagoya already earn a wage above the minimum. Unfortunately, it does not seem enough to soften the deep shortage of workforce. The Government is aiming to improve the working conditions in Japan in order to attract foreign talent, so these kinds of strategies are important to secure the current workers and draw new ones.
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Half writer, half reader. Tokyo based and deeply in love with - you can easily find me meandering around Shibuya or Shin-Okubo. Communication and marketing assistant by day, video game translator by night.