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yesterday

Japan Approves Record Minimum Wage Increase to 1,118 Yen, Overtaking South Korea

It will come with targeted support for municipalities exceeding the recommended rate to bolster household purchasing power.

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People walk at Shibuya crossing in Tokyo, Japan, August 4, 2024. REUTERS/Willy Kurniawan/File Photo
Employees of Suzette Holdings Co. work at the shop in Tokyo, Japan April 27, 2023. REUTERS/Kim Kyung-Hoon/File Photo
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Overview

  • The Central Minimum Wage Council approved a 6 percent increase in the national average minimum wage to 1,118 yen per hour, effective in October and marking the largest rise since 2002.
  • The new rate will surpass South Korea’s minimum wage for the first time in two years.
  • Government data showed real wages fell for the sixth straight month in June as inflation continued to outpace pay growth.
  • Prime Minister Shigeru Ishiba pledged targeted aid for municipalities that set wages above the official guideline and reaffirmed a decade-end goal of 1,500 yen per hour.
  • Small businesses that employ about 70 percent of Japan’s workforce may struggle to absorb higher labor costs as prefectural councils adjust local rates in line with the central recommendation.