Japan’s minimum wage

Unlike in England where employers must apply the same minimum wage (£5.93 for over 21s) regardless of whether their employees work in London or Manchester, in Japan different rates apply dependent on region as well as business sector.

For example, a factory worker in Tokyo must receive ¥821 per hour as a minimum whereas somebody doing a similar job in Yamagata praefecture must receive only ¥645 ph as a minimum. As an example of how minimum wages differ from sector to sector, a steelworker in Aichi would have to be paid ¥862ph as a minimum in comparison with a department store sales adviser working on the same street who would only have to be paid ¥785ph as a minimum.

Recently there has been a push to raise minimum wage rates to above the 800 Yen threshold regardless of region or sector. The government is proposing this under the assumption it will improve economic fortunes. In a recent tweet, corporate lawyer Nao Yoshizawa commented the following in relation to a new report of an investigation into the effect of a rise in the minimum wage for small-medium size enterprises.

“厚生労働省の報告書では、賃金引き上げによる影響を受ける中小企業の支援を行えば、賃金引き上げの前提が整うような記載があるが、中小企業支援をやったからと言って賃金引き上げができるわけではない。海外の労働力との競争にさらされている視点からの分析が欠けている。日本だけがユートピアになれるわけがない.”

Translation: “The Ministry of Health, Labour and Welfare’s report suggested the ground would be ready for an increase in the minimum wage if measures are put in place to provide financial support to those SMEs (small or medium sized enterprises) most exposed to its effects. However, simply because SMEs are receiving financial support doesn’t mean that wages can be increased. The Japanese labour force needs to be analysed against the background of competition with the labour force of other countries. It’s not as if only Japan has the right to be a utopia.”

I tend to agree. In the UK more needs to be done to help provide SMEs with a workforce at a price cheap enough to help them compete globally. Unfortunately, in the UK we are saddled with a workforce requiring high wages to service their expensive mortgages or rent, so it is very difficult for UK SMEs to compete with those in other countries. I guess we have no choice but to become one-man-bands for the time being.