Japan plans to raise the minimum hourly wage to an average of 1,004 yen ($6.91), beyond the level proposed by a government committee, as consumers' spending power is slumped by inflation.
The Ministry of Labor announced on Friday that Japanese prefectures will increase the minimum wage by an average of 43 yen per hour for the current fiscal year. The increase, due to take effect next October, is the largest since wage increases began to be recorded in 1978.
The government advisory committee had recommended an increase of 41 yen, bringing average wages to 1,002 yen for the current fiscal year.
Tokyo, which has the largest minimum wage in the country, is planning an increase of 41 yen to 1,113 yen, while neighboring Kanagawa Prefecture will register a new minimum wage of 1,112 yen, after an increase of 41 yen. Okinawa, which has the lowest wage level, plans to raise it by 43 yen to 896 yen.
Inflation continues to weigh on the Japanese economy, and while total cash incomes for all workers rose 2.3% year-on-year in June; actually dropping by 1.6% when adjusted for price increases.
The failure of salaries to keep pace with inflation has eroded the purchasing power of consumers.
GDP figures for the Q4 showed strong foreign demand that drove a surprising 6% annual growth rate, but the data also indicated weak business and private spending.
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