Japan plans another record minimum wage hike, says report
The proposed hike, to about ¥1,118 ($7.43) per hour, would exceed last year's increase of 5% and be the largest since the current system began, the agency added, without citing sources.
Prime Minister Shigeru Ishiba's administration set a target last year of raising the average minimum wage by 42% to ¥1,500 per hour by the end of the decade.
Raising the legally binding minimum wage would boost households' purchasing power, but squeeze profits at small firms that struggle to make ends meet.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Japan Times
20 minutes ago
- Japan Times
Bain's Japanese plane seat-maker sees U.S. hub as shelter from Trump tariffs
A newly acquired Bain Capital company in Japan that makes airplane seats, toilets and galleys is betting its U.S.-based manufacturing hub will give it an advantage under President Donald Trump's tariff regime. Armed with private equity cash, Jamco's new management is rebooting its aircraft seat business, chasing market share from rivals RTX's Collins Aerospace and France's Safran, Executive Chair Kate Schaefer said in an interview. Supply chain issues that have seen wait times for cabin fittings blow out to as long as three years — forcing the likes of Delta Air Lines and American Airlines to ground newly delivered jets as they await seats — also present an opportunity to fill, Schaefer said. "Right now with everything that's going on with tariffs, it appears to be an advantage in manufacturing and assembling these seats in the U.S.,' she said. The company is also promising to deliver products in as little as six months. Jamco's main production line is located near Boeing's largest assembly line in Everett, just outside Seattle. The U.S. has rolled out a raft of tariffs on global trading partners, with Japanese and European Union goods being levied at 15%, and up to 25% for India and 39% for Switzerland. Across the industry, carriers from Singapore Airlines to British Airways are spending hundreds of millions of dollars revamping seats as they upgrade cabins to lure more high-end travelers. Jamco plans to focus on higher-margin first-class and business seats, which can cost from $80,000 to $160,000 each depending on materials used and the level of customization required. Jamco's seat-making business struggled during the COVID-19 pandemic as global travel bans and border closures hammered the aviation industry. It paused research and development during the pandemic, but is restarting that under new management. Schaefer said the business has a slim order book but a factory and a workforce ready to go. Previously, Jamco counted the likes of Singapore Airlines and Dutch carrier KLM as top customers for its seats. Its other business units continue to make components and equipment such as galleys for Boeing and Airbus jets. Jamco was bought by Bain in a $700 million buyout earlier this year. Like Virgin Australia Holdings, which delivered Bain a 3.5 times' return on its initial investment when it listed the airline in June, the private equity firm says it aims to pursue an initial public offering of Jamco in a five-year time frame. Bain is also actively looking for smaller complementary acquisitions to expand on Jamco's current line of work. Bain's Tokyo-based leadership who led the deal, Masa Suekane and Nick Gattas, sees Jamco as a "bet on the industry,' bolstered by the decadelong waiting list for new planes. Jamco aims to take advantage of the challenging ramp-up in wide-body production by Boeing and Airbus as an "attractive' five-year window to win new business.
Japan Times
30 minutes ago
- Japan Times
Amid inflation, Japanese government panel proposes record ¥63 minimum wage hike
A government panel has recommended a record hike of ¥63, or 6%, for the average minimum hourly wage in the country for fiscal 2025, up from the previous year's proposal of a ¥50 increase. The recommendation made Monday by the Central Minimum Wages Council, which advises the labor minister, would raise the average minimum wage to ¥1,118 per hour, with hourly pay likely exceeding ¥1,000 in all 47 prefectures. The recommended hike reflects the rising prices of rice and other goods. Based on the proposal, the prefectures' individual councils will make their own decisions, and the new wages will apply from early October. To compile the latest minimum wage proposal, the government council sorted the 47 prefectures into three groups based on their economic strength. It set the proposed hike at ¥63 for group A, which includes Tokyo, Osaka and four other prefectures, while group B consists of 28 prefectures, including Hokkaido, Fukushima, Ishikawa and Hyogo. Despite having weaker economies than the other two groups, group C, made up of the remaining 13 prefectures, was advised to implement a ¥64 wage increase in an effort to rectify wage differences with other regions and address serious labor shortages. Among the 13 are Aomori, Iwate, Kochi and Kagoshima. If the prefectural councils implement hikes as recommended by the central government council, all 31 prefectures whose minimum hourly wages are below ¥1,000 would see the floor wage exceed the level. The central government council raised concerns about the rising prices of goods and services, which are weighing on household finances. According to the nation's consumer price data, food prices surged an average of 6.4% year on year in the period between October 2024 and June 2025. Prices of goods and services purchased about once a month, including electricity bills, went up 6.7%. The council's decision also reflected the pay hikes agreed to in this year's labor-management wage negotiations. A subcommittee of the council held a total of seven meetings to discuss the fiscal 2025 minimum wage recommendation, the first time in 44 years that so many meetings have taken place, as it coordinated the exchange of views between the labor and management sides. The council's latest proposal, however, fell short of the 7.3% annual increase needed for the central government to achieve its target of raising the nation's minimum hourly wage to ¥1,500 on average in the 2020s. The government has been providing support, including subsidies, to prefectures implementing hikes beyond the council's recommendations. "We'll continue to take every possible measure to support management reform and wage hikes, including at small companies and micro-businesses," Prime Minister Shigeru Ishiba told reporters Monday after the panel meeting. "The basic idea that wage hikes are the cornerstone of a growth strategy and related efforts are spreading steadily and bearing fruit," Ishiba said. He also said that the government will intensively support prefectures that conduct wage increases surpassing the levels recommended by the central council. "We are determined to make further efforts," Ishiba said in reference to the ¥1,500 goal. "The target can be attained once our measures yield positive results."
Japan Times
34 minutes ago
- Japan Times
South Korea, U.S. prepare for summit with details of trade deal unresolved
As South Korea and the United States prepare for a summit of their leaders, topics left unresolved by a recent trade deal provide scope for more disputes between the key allies and trade partners, six former negotiators and experts said. U.S. President Donald Trump may use the summit with counterpart Lee Jae Myung to seek more concessions on defense costs and corporate investments, left out of the deal, while non-tariff barriers and currency could prove thorny issues, experts said. No official summit date has been disclosed, though Trump last week gave a time frame of two weeks. The absence of a written agreement underpinning last week's talks could open the way for disputes, with some differences already emerging in the two sides' accounts of the deal. Key among these was Sunday's denial by a South Korean presidential adviser of U.S. claims that it would take 90% of the profit from project investments of $350 billion by South Korea, which also agreed to open up its domestic rice market. "Even a binding deal like the FTA has been efficiently scrapped," warned Choi Seok-young, a former chief negotiator for the Korea-U.S. free trade deal, signed in 2007. "And this is just promise." Last week's pact was scaled down from South Korea's previous plans for a package deal on trade, security and investment envisioned in the run-up to the summit between Trump and the newly-elected Lee. South Korean President Lee Jae Myung delivers a speech during a press conference to mark his first 30 days in office on July 3 in Seoul. | Pool / via REUTERS But Japan struck a deal with the United States sooner than expected, spurring South Korea into a scramble for a trade-focused pact, leaving issues of security and investment for the coming summit, presidential adviser Kim Yong-beom said. Uncertainty clouds plans for $350 billion in funds Trump has said South Korea would invest in the United States in projects "owned and controlled by the United States" and selected by him, though he gave few details of the plan's structure or timing. The allies face challenges in ironing out details of the fund at upcoming working-level talks, South Korean Finance Minister Koo Yun-cheol told reporters on Friday. "People say the devil is in the details," he added. In a social media post, Commerce Secretary Howard Lutnick gave an assurance of "90% of the profits going to the American people", while White House spokesperson Karoline Leavitt said part would go to the U.S. government to help repay debt. But Kim, the presidential adviser, said the two sides did not discuss profit distribution during talks, and South Korea expected the profit to be "reinvested" in the United States. The idea of the United States potentially taking most of the profit is "hard to understand in a civilized country", he added, while dismissing as "political rhetoric" Washington's claim that it would make all decisions about the fund. South Korea had added a safety mechanism to reduce financing risk, including U.S. commitments to buy products from the projects, under an "offtake" clause and invest in commercially feasible projects, he said. Seoul officials have said $150 billion would go to the shipbuilding industry, with the rest earmarked for areas such as chips, batteries, critical minerals, biotechnology, nuclear power and other strategic industries. The specifics of the structure have not been determined, said Kim, adding that loans and guarantees make up a majority of the funds, with equity investments accounting for a small part. South Korean Finance Minister Koo Yun-cheol speaks ahead of his departure to Washington to meet U.S. Treasury Secretary Scott Bessent, at the Incheon International Airport in Incheon, South Korea, on July 29. | Yonhap / via REUTERS Leavitt said South Korea would provide "historic market access to American goods like autos and rice," echoing earlier comments by Trump. But South Korea said repeatedly there had been no agreement on the agriculture market, including beef and rice, despite strong pressure from Washington. Trump expressed keen interest in Korea's quarantine process for fruits and vegetables, Seoul said, improvements to which will figure in planned technical talks on non-tariff barriers that will also cover vehicle safety rules, but gave no details. Other non-tariff barriers such as regulation of Big Tech could be hurdles. "We cannot be relieved because we do not know when we will face pressure from tariffs or non-tariff measures again," Trade Minister Yeo Han-koo said last week on returning from Washington. Defence costs are expected to emerge as a key issue during the upcoming summit, with Trump having long said South Korea needed to pay more for the U.S. troop presence there. In addition to the $350 billion, Trump said South Korea agreed to invest a large sum of money in the United States, to be announced during the summit, which he said on July 30 would be held within two weeks. The allies are holding working level-talks on currency policy, put on the agenda at April's opening round of trade talks.
