Editorial: Raising minimum wage crucial for economic recovery
June 30 , 2017Komeito is looking forward to the discussions aimed at raising the minimum wage to 1,000 yen per hour.
The Ministry of Health, Labor and Welfare has begun deliberations on making changes to the minimum wage for the fiscal year, with an aim to reach a conclusion by July’s end.
Every year, labor and management representatives meet to discuss and decide the range of revisions to be made to the minimum wage. This then serves as a guide to decide minimum wage at the prefectural and city government levels.
In fiscal 2016, minimum wage was raised by 25 yen, an increase of 3 percent, bringing the national average to 823 yen per hour—the highest increase since fiscal 2014. The focus of this fiscal year’s deliberations is whether employers will accept another major raise in wages.
Changes to the minimum wage will directly affect worker incomes and help boost Japan’s GDP, 60% of which is generated by consumer spending. From this perspective, raising the minimum wage is a vital step for accelerating a virtuous cycle of growth and leading the economy on a solid path to recovery.
The government’s action plan for labor reform published in March states that upon discussions with both labor and management, it will target a 3% annual increase in minimum wage until the national average reaches 1,000 yen per hour. If such a cycle were to be established, Japan would arrive at the desired goal in the 2023 fiscal year. Komeito urges management to make this a reality, while also looking out for those small- and medium-sized enterprises (SMEs) with weaker financial foundations.
In this context, it is important to note that in December 2016, the investment criteria for the Act against Delay in Payment of Subcontract Proceeds, Etc. to Subcontractors was revised for the first time in 50 years.
Under the revised law, contractors are requested to make payments to subcontractors in cash wherever possible, refraining from payment by bills. In addition, actions amounting to intimidating subcontractors that are deemed illegal under the law—acts such as forcing subcontractors to buy one’s own products—were expanded from 66 to 141. Komeito has been a major force behind enacting such changes.
It will become increasingly crucial to help SMEs create an environment where they are safely able increase wages for their workers. Toward that end, Komeito calls on the government to fully support the efforts of labor and management.