Let us win even bigger regional minimum wage increase to protect workers’ lives from soaring prices

Kurosawa Koichi
Secretary General
the National Confederation of Trade Unions (Zenroren)
August 2, 2022

The government Central Minimum Wage Council on August 2 reported to the Health, Labor and Welfare Minister its decision to recommend an increase of 31 yen for prefectures in regional groups A and B and 30 yen for groups C and D for fiscal 2022. The national average will be 961 yen, which up 3.3 percent from fiscal 2021.

The recommended increase is bigger for lower minimum wage regions: 1.4 percent for group A, 1.3 percent for group B, 1.6 percent for group C, and 1.9 percent for group D. Considering that ongoing price hikes are forcing low-income earners to shoulder a heavier burden, we cannot overlook the fact that the recommended increases, which would widen regional gaps, are not based on clear reasons. The council says it attached importance to one of the three factors for determining the benchmark for this year, i.e., the workers’ cost of living. But given the fact that prices are rising by at least three percent, the decision should have taken into account last year’s average price increase and the benchmark at 28 yen. If this is ignored, the current level of cost of living may not be maintained.

Take a look at the rest of the world and you will find that the minimum wage is increasing in many countries amid soaring prices. It’s been raised to 12 euros (about 1,570 yen) in October in Germany, 9.5 pounds (about 1,470 yen) from April in Britain, and 10.85 euros (about 1,420 yen) from May in France. (Japanese yen is based on the average exchange rates for 2021.)

Management representatives agreed to tolerate raising the minimum wage but insisted that the increase should be as small as possible on the grounds that manufacturers are forced to keep profit as small as possible due to difficulty shifting soaring prices of materials onto the end user prices. But even the call for raising the minimum wage has been heard from the business sector. Suntory Holdings CEO Niinami Takeshi said, “The minimum wage should be raised to 1,000 yen or more without delay in all prefectures, with a view to further raising it to 1,500 yen in several years.” Clearly, raising wages is indispensable for creating an economic virtuous cycle.

On June 24, Zenroren submitted a position paper to the Central Minimum Wage Council. It said, “Restraining a minimum wage increase is unacceptable at a time when soaring prices are directly affecting people’s livelihoods. We demand a substantial minimum wage increase and the establishment of a uniform national minimum wage system to protect people’s living by reducing poverty and rectifying the income inequality.” Zenroren and its regional organizations conducted a “minimum cost of living survey” in 27 prefectures and found that a monthly income of more than 240,000 yen (or more than 1,500 yen per hour) is necessary for a worker to make a humane living everywhere in the country by working eight hours a day.

The regions where the economic inequality is widening are in a very serious situation. In fiscal 2021 alone 12 prefectural assemblies and 124 local (city, town, and village) assemblies adopted their respective opinions calling for a minimum wage increase, rectification of the economic inequality and financial support to small- and medium-sized businesses.

Prime Minister Kishida Fumio in his “Basic Policy on Economic and Fiscal Management and Reform 2022 (Basic Policy)” said the government will “aim to raise the national average minimum wage to 1,000 yen.” But the Basic Policy in 2010 had to raise it to 1,000 yen by 2020 following an agreement on employment strategy reached by the government, labor and management to raise the national average of minimum wage to 1,000 yen by 2020. However, this year’s benchmark would allow the minimum wage to be kept at 850 yen for 40 prefectures in the lowest group, which is below the national average of 960 yen.

Regional minimum wage councils are meeting to decide on their minimum wage levels. Last year, regional minimum wage was raised higher than the central council’s recommendation in seven prefectures.

Zenroren will make every effort to win a far bigger minimum wage increase than the Central Council’s recommendation and fight to rectify the regional gaps by making the voices of the workers heard with the union members in full strength. It is also determined to make even greater effort to win the establishment of the uniform national minimum wage system.