Photo/Illutration A Central Minimum Wages Council subcommittee holds a meeting in Tokyo on July 30. (The Asahi Shimbun)

A labor ministry panel has called for raising the weighted average minimum wage across Japan to 901 yen ($8.25) per hour in the current fiscal year, which runs through March, up 27 yen from the previous fiscal year.

The minimum hourly wage is expected to rise above 1,000 yen for the first time in Tokyo and Kanagawa Prefecture under nationwide hikes recommended by a Central Minimum Wages Council subcommittee.

If minimum wages continue to be ramped up at the current pace, the government’s target of 1,000 yen for the national average is likely to be achieved four years down the road.

But the wage picture is mixed, with urban areas with a large working population are leading the uptick in overall wage levels.

The fundamental objective of setting legally binding minimum wages is to ensure that any hard-working citizen can make a decent living. From this point of view, it is clear that the government should take stronger policy actions to accelerate the pace of minimum wage growth across the nation.

Minimum wages have been raised over the past three years in line with the target of annual increase of around 3 percent set by Prime Minister Shinzo Abe’s administration.

The administration’s economic and fiscal policy outlines for this year call for hitting the 1,000-yen national average target earlier than scheduled as well as additional policy efforts to narrow regional disparities.

But an organization of small and midsize employers openly lobbied against the proposal, forcing the government to compromise and settle for the usual 3 percent hike.

The difference between the highest minimum wage, that for Tokyo, and the lowest one, for Kagoshima Prefecture, actually widened to 226 yen from 224 yen last year, dimming the prospect for the government-led initiative to boost minimum wages.

Labor unions strongly demanded that minimum wages in any area be 800 yen per hour or higher, as they did last year.

But the recommended increases for the current year will allow only two prefectures--Miyagi and Kagawa--to take themselves off the list of areas with a minimum wage of less than 800 yen, while leaving the figures for 17 other prefectures in the 700-yen range.

The outflow of labor from low-wage rural areas could accelerate even further unless the regional disparities are reduced.

The government should come up with effective measures to tackle this problem, such as larger hikes for low-wage areas than for urban areas.

In the July 21 Upper House election, some opposition parties promised a flat national minimum wage. The government may need to review the current system for setting minimum wages, in which the prefectures are categorized into four groups in terms of wage levels and the minimum wage is set for each category.

It has long been pointed out that minimum wages in Japan are much lower than the levels in other major industrial nations including Britain and France.

It is said that there are many people working for minimum-level wages who fully depend on that income for their livelihoods, including non-regular and foreign workers.

There can be no hope for healthy growth of consumer spending unless the wage levels of these people are pushed up.

It is, of course, necessary to avoid any excessively steep wage hike that could force many small and midsize businesses to cut jobs.

The government needs to take steps to help smaller firms deal with higher wages, such as policy support to their efforts to boost productivity and measures to improve the terms of business deals between large companies and their subcontractors.

But there are no signs that the wage increases in the past few years have had any significant negative impact on the employment picture.

Changes in the approach to making policy decisions on minimum wages, including, for instance, introducing public discussions based on objective data, could also help public support for minimum wage increases.

--The Asahi Shimbun, Aug. 1