Minimum Wage: This Significant Increase Will Help Reduce Disparities Between Regions

Editorial

13:59 JST, August 5, 2025

After seven rounds of deliberations — an unusually high number — the minimum wage was raised by the largest amount ever. This will be highly beneficial for workers, who are suffering from high prices.

Going forward, the government will need to make further efforts to create an environment facilitating wage hikes at small and midsize companies.

The Central Minimum Wages Council, of the Health, Labor and Welfare Ministry, has compiled guidelines for the national average minimum wage for the 2025 fiscal year, proposing an increase of 6.0% from ¥1,055 at present to ¥1,118. That is an increase of ¥63, exceeding the ¥50 raise in fiscal 2024.

This marks the fifth year that such wages have been raised by a record amount. All prefectures are expected to see a minimum wage exceeding the ¥1,000 threshold.

The minimum wage serves as the base wage for all workers, regardless of whether their employment is regular or non-regular.

The council’s deliberations were carried out by three groups: representatives from labor and management as well as scholars.

This year’s deliberations spanned seven sessions, the most in 44 years. While the labor side demanded a much stronger response to rising prices, the management side was opposed, arguing that an excessive increase could strain the finances of small and midsize companies.

Ultimately, the outcome is praiseworthy, as it will help to steadily reduce wage disparities among workers.

Since the government made raising the minimum wage a pillar of its economic policy, it has achieved large hikes. And last autumn, Prime Minister Shigeru Ishiba significantly moved up the target date for achieving a minimum wage of ¥1,500, from the mid-2030s to the 2020s.

To reach this target, it will be necessary to continue raising the minimum wage by more than 7% per year, and this likely influenced the council’s deliberations.

However, given the difficulty of this year’s deliberations, it will be important to pay closer attention in the future to the situation of small and midsize companies.

If the minimum wage is raised too quickly, it could lead to these small and midsize firms going bankrupt or closing, which would result in job losses in regional communities. Over 70% of small and midsize companies say that meeting the government’s target of ¥1,500 is “impossible” or “difficult,” according to a survey by the Japan Chamber of Commerce and Industry.

There is much that the government needs to do in relation to minimum wage hikes.

It must monitor closely to ensure that small and midsize companies are able to pass on higher raw material and labor costs to their large corporate clients in transactions. Funding should also be provided for efforts to improve productivity, such as labor-saving measures and attempts to digitalize.

Based on the central council’s guidelines, regional minimum wage councils will determine the lowest allowable pay in each prefecture. The highest minimum wage in fiscal 2024 was Tokyo’s, at ¥1,163, while Akita Prefecture had the lowest at ¥951. Given the aim of revitalizing regional economies, there should be deeper discussions on addressing regional disparities.

(From The Yomiuri Shimbun, Aug. 5, 2025)