Abe wants minimum wage to rise to ¥1,000

(THE JAPAN NEWS)Prime Minister Shinzo Abe said the government will work to boost the minimum wage to a national average of ¥1,000 per hour, through a policy encouraging wage hikes of about 3 percent every year. He made the remarks during a Tuesday meeting of the Council on Economic and Fiscal Policy that he chairs.

At the meeting, Abe instructed relevant ministries and agencies to take measures to help companies raise wages.

The current average minimum wage stands at ¥798. If this increases by 3 percent every year, the ¥1,000 target can be expected to be achieved in the early half of the 2020s.

Numerical targets for average minimum wages are usually set by a panel, whose members include experts and representatives from labor and management circles, for the health, labor and welfare minister. Through the labor ministry, the government will urge employers to raise wages.

However, the ¥1,000 target could provoke a backlash mainly from small and midsize businesses in regional areas as wage hikes will increase labor costs. It is uncertain whether wages can be raised smoothly as per the government calculations.

The government plans to increase the nation’s nominal gross domestic product to ¥600 trillion by around 2020 from the current ¥500 trillion. To realize GDP growth, its nominal figures need to increase at about 3 percent each year, with this leading the government to conclude that consumption should be boosted through minimum wage hikes.

The ¥1,000 target will be mentioned in the government’s emergency measures to promote the dynamic engagement of all citizens, a key policy of the Abe administration