What Is the Minimum Wage in Japan?
When examining Japan’s minimum wage, it’s important to note that there are two types of minimum wages, which are set based on the current cost of living and vary by location and industry. Japan has a regional minimum wage and an industry-specific minimum wage. The regional minimum wage applies to workers who live in a certain region. This minimum wage rate applies to all employees, no matter which industry they work in.
The industry-specific minimum wage applies to employees in certain industries. This minimum wage is set for all employees who work in a certain industry, regardless of where they live. The rising costs of living and increased taxes have caused these minimum wage rates to increase throughout the years.
Japan’s currency is Japanese Yen. Japan’s Ministry of Labor provides recommendations on minimum wage rates but it’s up to the regional bureaus and industries to set the rate. The goal is to ensure working citizens can live independently on minimum wage salaries. When you examine the minimum wage in Japan, it’s important to break down the regional minimum wages and industry-specific minimum wages to better understand how workers are paid.
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Regional Minimum Wage in Japan’s Most Populous Prefectures
The country of Japan is divided into 47 prefectures. A prefecture is a district within the country that is ruled under the government of its own prefect. Similar to how the U.S has states with minimum wages, Japan has prefectures with their own regional minimum wages. The minimum wage is set by the regional bureau and is calculated to ensure minimum wage workers can afford basic necessities.
Below are 10 of Japan’s most populous prefectures and their corresponding minimum wages in Japanese Yen, which are based on one working hour. These minimum wages are effective from October 1, 2019 through September 30, 2020.
- Tokyo: ¥1,013;
- Kanagawa: ¥1,011;
- Osaka: ¥964;
- Aichi: ¥926;
- Saitama: ¥898;
- Chiba: ¥923;
- Hyogo: ¥899;
- Hokkaido: ¥861;
- Fukuoka: ¥841;
- Shizuoka: ¥885.
Although exchange rates are always changing, the highest minimum wages on this list would be around $9.30 in USD. The lowest would be around $8 in the United States. That puts Japan on par with states like Illinois and Nebraska when it comes to minimum wage.
Industry-Specific Minimum Wage in Japan
Similar to how some U.S. states and cities set their own higher minimum wages, some industries in Japan also set minimum wages that may differ from the regional minimum wage. In most cases, industry-specific minimum wages are higher than regional minimum wages.
When a worker’s position is subject to both the regional minimum wage and an industry-specific minimum wage, the employer must pay the worker the higher wage of the two. For example, say a warehouse worker lives in Chiba, which has a regional minimum wage set at ¥923. If the industry-specific minimum wage for the warehouse industry is set at ¥925, the worker must be paid at least ¥925 Japanese Yen per working hour.
How Does Japan’s Minimum Wage Compare to the United States?
With both a regional and industry-specific minimum wage, Japan must balance the wages that are set to ensure workers don’t crowd one region or industry. There’s a constant battle between the rising costs of living in the country and the need for businesses to earn profit and continue thriving.
The minimum wage in Japan is considered low and may make it hard for workers to live comfortably. However, most industries and companies offer higher wages to ensure workers are earning living wages. Factors such as the trade war with China, immigration laws, and rising consumption taxes may affect the minimum wage and the wages companies can afford to offer employees.
Pros of Japan’s Minimum Wage Laws
Japan’s minimum wages are set to emphasize productivity and increase consumer spending. Labor laws in Japan force employers to cover employee commuting costs and provide overtime pay when more than 40 hours per week are worked by a single employee.
After six months of employment, a worker must be provided at least 10 days of paid time off, which includes paid holiday leave. To adhere to Japanese labor laws, companies must also allow employees to have at least one 45 minute break for each eight hour shift they work.
Cons of Japan’s Minimum Wage Laws
Japan’s minimum wages are set to ensure workers may live comfortably. However, the current minimum wages may be set too low for employees to cover basic necessities with average working hours. Japanese authorities are hesitant to address this issue due to the probability that higher minimum wages would force small- and medium-sized businesses to close.
The purpose of setting regional and industry-specific minimum wages in Japan is to ensure workers are earning living wages. While current minimum wage rates are debatably low and may not allow all workers to live comfortably, Japanese labor laws include other advantages, such as guaranteed paid overtime.
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This post was updated March 25, 2020. It was originally published March 25, 2020.