business

Japan to raise minimum wage by 3% to boost consumption

20 Comments
By Stanley White

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Uggh! Here's another kick in the balls for everyone not making minimum wage. Most people can consider this to be about a 2% decrease in income as prices will rise.

0 ( +6 / -6 )

"The national average of Japan’s minimum wage was 780 yen per hour last fiscal year, so a 3% increase would still not buy more than a bowl of ramen noodles - an illustration of the" economic ignorance of "policy makers". As Dan Lewis said, a kick in the privates for anyone making even slightly more than minimum wage. Next, the price of your basic lunch will rise to compensate for the increase.

2 ( +7 / -5 )

Abe told cabinet ministers he eventually wants to raise the weighted national average minimum wage to 1,000 yen per hour.

What the government tells everyone-- " eventually," and " tarrifs off eventually - in another 16 years " 3% increase on the minimum wage is an insult. As I keep saying, other countries pay a much higher minimum wage with overall much cheaper food prices than Japan and they all manage fine.

4 ( +5 / -1 )

The national average of Japan’s minimum wage was 780 yen per hour last fiscal year, so a 3% increase would still not buy more than a bowl of ramen noodles

Useless.

an illustration of the difficulty policy makers face in boosting consumption.

I doubt if it would be more difficult than the reinterpretation of Article 9. I can't see anyone going out to protest a wage increase. Just do it.

and the decision does not need to be approved by parliament, a Cabinet Office official said

There you go.

Abe told cabinet ministers he eventually wants to raise the weighted national average minimum wage to 1,000 yen per hour.

What does eventually mean?? In 5 years? 10 years? Why not just do it straight away? He has done QE which has raised prices AND raised taxes. The public is on the ropes now. Show some

Abe’s administration is also expected this week to present steps intended to slow the decline in the population as the government tries to bring new energy to its economic agenda.

Since they're dead set against immigration, I am very interested in seeing what they will do.

-2 ( +0 / -2 )

Are you kidding!?

What about the yen currency getting weaker by the day?

Goods and services are more expensive now.

Doesn't this nullify the 3% wage hike?

Whom are we fooling here if not ourselves?

1 ( +2 / -1 )

Abe told cabinet ministers he eventually wants to raise the weighted national average minimum wage to 1,000 yen per hour......in order to collect more taxes from the poor or marginalized and to justify raised prices on consumer goods.

Japan, refuse to work until demands are met.

Strike. Do not provide the service industry jobs that the elite rely on you for.

Until you are treated like less than scraps, stop cleaning their offices, serving their food and drink, repairing their houses and cars, driving their taxis, educating their children,

Just STOP.

Demand better. Action, not words. Action.

0 ( +1 / -1 )

Give them a 3% pay raise and they might forget about the 10% sales tax increase. How stupid does Abe think people are?

3 ( +4 / -1 )

@Sauran: I'd rather pass on both. Gaining 3% only to lose 10% is not exactly "getting ahead".

0 ( +1 / -1 )

There isn`t much (any) actual evidence that an increase in the minimum wage this small is going to have an effect on the prices of goods. I am sure this will come as good news to all the commenters panicking about that concern.

Even with the increase, the minimum wage in Japan is extremely low in comparison to elsewhere. In my home country Canada not a single province has a minimum wage lower than 10$ per hour, which is about equivalent to the 1000 Yen Abe is aiming at. And guess what? Most consumer products in Canada are about as cheap or cheaper than they are in Japan.

To take the issue more seriously though, this raise is probably meaningless in light of the labor shortage. Most employers are already having to pay more than minimum wage just to attract workers so a 3% rise in the minimum probably won`t have much actual effect on wage levels.

0 ( +0 / -0 )

Whoopee!! An extra rice ball at the local Family Mart every month.

3 ( +4 / -1 )

There wiil be no measurable economic effect from a change this small; in addition, as sales tax is set to increase an additional 2% it will be counterbalanced. Mandate a minimum wage of 1,000, or better still, 1,500 yen per hour if you want to stimulate economic activity. Low wage earners spend a much higher proportion of their disposable income than do those further up the economic food chain.

-1 ( +0 / -1 )

This is just a scam, 2% raise will create more tax than benefits to workers. Specially for those who are in the threshold.

1 ( +1 / -0 )

What the government tells everyone-- " eventually," and " tarrifs off eventually - in another 16 years " 3% increase on the minimum wage is an insult. As I keep saying, other countries pay a much higher minimum wage with overall much cheaper food prices than Japan and they all manage fine.

No, other countries have not "managed fine" after raising minimum wages. Several things happen when the minimum wage is raised. First, prices are raised to compensate, meaning that inflation negates the value of the increase. And if people are unwilling to spend more, then hours and headcount are reduced, and in exchange for getting a couple hundred yen extra per hour, you work a couple of hours less per day, and new coworkers won't be hired.

What has been the effect of recent minimum wages raises in Washington and California? Exactly the above.

Lastly, increasing the pay for people to do menial and unskilled work discourages people from learning more valuable skills and professions, and we end up with a service-based economy with fewer and fewer educated and skilled people. I went to college and got a degree because I didn't want to be stuck doing low-paying work.

Another thing, remember that the majority of Japan's employers (90%) are small businesses. These business have seen their customer base dry up as the population has shrunk, they have seen sales decrease as people spend less because of the increase in the consumption tax. Most of these small business earn little or not profit compared to the big companies in Japan Inc, exactly how are they going to afford paying more wages?

-3 ( +2 / -5 )

The only thing that surprises me about this is that they haven't made it "optional for companies to implement themselves or not".

This won't do squat. A THREE percent increase on MINIMUM wage, while other wages see no increase, and prices of everything go up a MINIMUM of two percent on top of the recent three percent consumption tax hike, and on top of an increase in the costs of everything and a decrease in amount.

As for the whole "Abe said he would like... eventually..." we all know what that means.

-1 ( +3 / -4 )

Raising wages is an urgent task for policymakers as Tokyo is keen to ramp up consumer spending, which is seen as crucial to boosting domestic demand and pulling the economy out of 15 years of deflation.

Is it just me, or do we hear this sort of language year after year? Nothing changes, just more talk & more panels. No results? More talk & more panels it is!

1 ( +2 / -1 )

Each year for how many years?

2 ( +2 / -0 )

I love coming on JT to read about the latest joke measures coming out of abe"s "government". Never fails to give me a good laugh!

1 ( +4 / -3 )

Japan (13th in the list of world net minimum wages, calculated with "purchasing power parities") would need an 80% increase to get to the same level as Australia and about a 25% increase to equal the UK's minimum wage.

http://www.businessinsider.com/minimum-wage-around-the-world-2015-5

0 ( +1 / -1 )

What posters don't seem to know is that they've raised minimum wage in Tokyo every year for over 10 years. In 2005, minimum wage was 714 yen per hour. That's gone up anywhere from 1 to 4% each year, with the latest number being 907 yen per hour. The average amount earned per part-time working housewife is just under 100,000 yen per month (94,832). If you were working at minimum wage, you would make an extra 3000 yen a month.

2 ( +2 / -0 )

How about making the minimum wage Y900 per hour this year and Y1000 per hour next year? What's so difficult about that? Companies can afford to pay it thanks to the reduction in corporation tax. If they can't afford it they can go out of business and their workers can find new jobs at higher wages elsewhere. After all, they keep telling us there is a labour shortage.

-2 ( +0 / -2 )

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