Photographer: Noriyuki Aida/Bloomberg

Japan Recommends Hiking Minimum Wage by 3%

  • Labor ministry panel made recommendation earlier this week
  • Minimum wage gains have failed to spur broader pay increases

The Japanese government recommended this year’s minimum wage be increased by 25 yen to 848 yen per hour ($7.64), the same amount that it was raised last year.

The minimum wage committee of the labor ministry made the recommendation earlier this week, according to a spokesperson at the ministry. Local governments evaluate the proposal and set pay for their prefecture, with the changes typically taking effect from October.

Prime Minister Shinzo Abe’s government and the central bank want wages in Japan to rise in hopes that that will fuel consumer spending and spur inflation. While minimum pay has increased for every year for more than a decade, overall wages are still stagnant and only rose 0.5 percent last year.

The central government only has direct control over the pay of public servants and the recommended minimum wage. By boosting the latter, it seeks to apply some pressure to boost pay across the economy.

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