Sunday, July 29, 2012

Proposed 10% increase in Minimum Wage

A subcommittee of a labor ministry advisory panel decided Wednesday to recommend that the nation's minimum hourly wage be raised by an average of 7 yen in fiscal 2012.

The size of the proposed increase was limited to less than 10 percent for the second consecutive year but exceeded the 6 yen hike of the preceding year. If raised in line with the recommendation, the average minimum wage will go up from 737 yen to 744 yen.

The subcommittee of the Central Minimum Wages Council, which advises Labor Minister Yoko Komiyama, agreed to move toward ending cases in which the minimum wage is below the level of welfare benefits by next fiscal year in principle.

Such cases are seen in 11 prefectures at present. The proposed minimum wage hike is expected to help eliminate the phenomenon in as many as nine prefectures.

But the negative gap is not expected to be eliminated in Hokkaido, where it presently stands at 30 yen, or Miyagi Prefecture, where the current shortfall is 19 yen.

In the three northeastern prefectures hit hardest by the March 2011 earthquake and tsunami, the minimum wage was recommended to be raised by 7-10 yen in Miyagi and by 4 yen in Iwate and Fukushima.

In fiscal 2011, which ended in March, wage levels were affected by the impact of the disaster. As a result, recommended minimum wage hikes were limited to 1 yen in about 80 percent of the nation's 47 prefectures.

In the current fiscal year, however, the proposed hikes in most regions exceeds the previous year's levels, reflecting the nation's economic recovery on the back of reconstruction demand after the disaster.

In addition, wages at small firms, used as a key reference by the panel, have grown 0.2 percent in the current year from the previous year, marking the first rise in four years.

The proposed minimum wage increases in all prefectures ranged from 4 yen to 20 yen.

The recommendation will be formally decided at a meeting of the council on Thursday. Based on the decision, panels in each prefecture will decide the minimum wage levels that companies will be required to pay to workers in line with local living costs.

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