Amari Calls for Japan Pay Rises as Minimum Wage Panel Meets

Japan’s economy minister called for pay increases to offset higher prices as a government panel meets to decide on whether to raise the minimum wage.

“Of course we want pay to rise faster than inflation,” Economy Minister Akira Amari told reporters in Tokyo today. The government wants to meet with labor unions and company representatives in the autumn regarding creating jobs and improving labor market conditions, Amari said.

Prime Minister Shinzo Abe is pushing monetary and fiscal stimulus to end more than a decade of deflation and revive the economy. The government wants salaries to increase so that inflation does not eat away at consumers’ spending power and undermine a recovery.

“We haven’t made any specific requests or instructions to the minimum wage committee,” Amari said. The panel started its annual meeting last week and will make a proposal on minimum wages at the start of August, according to the labor ministry.

Each of Japan’s 47 regional governments will take this proposal and then decide on the minimum wage in the prefecture. Currently, the national average minimum is 749 yen ($7.41) per hour, and ranges from 652 yen in two rural prefectures to 850 yen in Tokyo.

The committee is made up of academics, and representatives of labor unions and employer groups.

Even as companies post higher earnings on a weaker yen, average wages haven’t risen in 12 of the last 13 months. Abe met in February with Japanese business leaders and urged them to increase wages and help end deflation.

Requesting Increases

Separately, Finance Minister Taro Aso and ministry officials met leading members of the Keidanren, the country’s biggest business lobby, in March and called for wage increases, Yuzuru Takeuchi, parliamentary secretary for finance and a lower house legislator, said in an interview last month.

The government plans to raise the minimum wage by more than 2 percent, the Sankei newspaper reported today, without citing anyone.

The Bank of Japan aims to achieve a 2 percent inflation target over two years. The government plans to raise the sales tax to 8 percent in April from the current 5 percent.

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