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Japan – Minimum wage to rise in 2014

31 December 2013

Japan's most influential business lobby has agreed to raise workers' base pay for the first time in six years, as the economy gains momentum and corporate earnings improve, the Asahi newspaper reported on Sunday.

According to many economists, an increase in base pay is essential to Prime Minister Shinzo Abe's pledge to end 15 years of mild deflation and to help the Bank of Japan meet its 2% inflation target.

The Keidanren business lobby will encourage its member companies to raise base pay next year in annual spring wage negotiations, the Asahi reported, citing a draft of the business lobby's negotiations strategy.

The Keidanren will leave it up to each industry to decide how much it will raise base pay, but its approval of wage hikes could encourage labour unions to request even higher pay and help lift wages throughout the economy.

BOJ officials have expressed some concern that workers' salaries have been slow to rise this year, so indications that pay will increase next year could make it more likely that the BOJ will meet its inflation target within its two year timeframe.

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