Japan hikes FY2026 average minimum wage guideline by 4.9% to 1,176 yen
Ideas
Increasing the minimum wage can be seen as both a positive or a negative depending on if you are part-time worker or a owner of a company that has to pay the increased minimum wage.
Part-time service workers, those who work in the service sector industry are usually the ones to get the minimum wage and of course the minimum wage is a cost or increased cost for companies and many, while they might want to see their employees get a higher income don't want or can't afford an increase in their profit margins.
Yes, that is exactly the challenge of giving workers an actual living wage and at the same time show some consideration for small and mid-size companies who usually have razor thin profits margins and can't really afford even a 55 yen increase in their costs.
This is where the government, if at all possible, should find a way to help out both groups as it seems there is an estimated 36 percent of all workers in this group and that means if they can't get a better wage, they of course really can't spend much in the economy which means less consumer spending and less growth for the economy.
The larger metro areas in Japan of course will get a higher minimum wage, as the cost of living in the large metro areas are more expensive but at the same time, even the small rural areas might have a large significant minimum wage group that also needs consideration as they too have to pay bills and feed their families.
But of course there is still the challenge with small and mid-size companies and what to do about them or for them as the government, doesn't seem to be doing much really to help them, but at the same time is it the responsibility of the government, in a market economy, to help every small and mid-size company that needs help.
But comes a point or a time, when its time to say enough is enough, and we, the government, for the good of society and the economy, need to step in with subsidies or programs, that actually do something to help small and mid-size companies who just don't have the needed resources to handle all of the increase in costs such as material costs, energy cost, and of course increased labor costs.
It is estimated that 99 percent of all companies in Japan are small companies and if a large or significant number of them can't pay their bills and are increasing faced with some kind of bankruptcy, what does that say about society or a government that doesn't find a way to help them in their time of need.
Unfortunately Japan's present day minimum wage is the 5th lowest among all OECD countries which means it has a long way to go to catch up with all the other advanced economies as it just shows how far Japan has fallen since the 1989 asset crash, when the Japanese economy was at its highest point.
But of course yes, the more rural regions have lower overall cost situation but at the same time, there are still people/workers there who need a higher minimum wage as they to have to take care of their families and or pay their bills.
Yes, again, companies are faced with not only an increase in possible minimum wage increases but also an increase in material costs and an increase in energy costs as sometimes it seems small businesses just can't get a break as their costs just keep increasing every year.
So the problem is both minimum wage earners and companies both continue to face increased costs as everyday inflation in Japan just keeps increasing affecting mostly the middle class and the lower middle class which many part-time workers belong too and then of course increased costs related to energy, materials, and then labor too are causing stress for many if not all small businesses in Japan these days.
In a perfect world, where the costs of energy and material were not significantly increasing small and mid-size companies might less hesitant to agree to the minimum wage increases but as now there is a triple threat for companies with increases in energy, materials and now possible an increase in labor costs there is unfortunately going to be some bankruptcies or some small businesses leaving the market as they just can't handle all of the increase in costs.
Small and mid-size companies in Japan might want to help their part-time or minimum wage workers but they are stressed on all sides and most likely there is nothing they can do unless they can get some kind of government help with the situation.
Have a nice day!
Article source: https://mainichi.jp/english/articles/20260729/p2g/00m/0bu/025000c
