Minimum Wage Increase Slows Under Takaichi Government

Economy Society Work## Far Short of Workers’ ¥75 Target

On July 28, the Central Minimum Wages Council, an advisory body to Japan’s Ministry of Health, Labor, and Welfare, recommended raising the average hourly minimum wage by ¥55 in fiscal 2026.

Labor representatives had pushed for a ¥75 increase, a considerable rise compared with the previous fiscal year, but corporate management representatives stressed the deteriorating conditions for small and medium-sized businesses due to instability in the Middle East. The council cited the slowing rate of inflation as a factor in its recommendation falling below the ¥63 rise in fiscal 2025. If the increase goes ahead as expected, it will raise the national average hourly minimum wage from ¥1,121 to ¥1,176.

The subcommittee’s guidelines divide prefectures into three categories according to their economic conditions. An hourly minimum wage increase of ¥54 was set for the 6 prefectures in Category A, which includes Tokyo and Osaka, while it was ¥56 for the 28 prefectures in Category B (including Hokkaidō, Hiroshima, and Fukuoka) and the 13 prefectures in Category C (including Akita and Okinawa). The wage hike was higher in Category B and C with the aim of addressing economic disparities, as well as the severe labor shortages in these areas. The council in each prefecture will decide the exact amount of the wage increases based on guidelines; new wage floors will be introduced from around October 2026.

The new minimum wage will be over ¥1,200 in Tokyo (¥1,281), Kanagawa (¥1,280), and Osaka (¥1,232). It will also be over ¥1,150 in the prefectures of Saitama, Chiba, Aichi, Kyoto, Hyōgo, and Shizuoka. At its lowest it will be less than ¥1,100 in a number of prefectures, mainly in Tōhoku, Kyūshū, and Shikoku.

While the previous administration of Prime Minister Ishiba Shigeru set a target of raising the national average minimum wage to ¥1,500 by the end of the 2020s, under Takaichi Sanae this fiscal year’s basic policy stance effectively postponed the deadline to as early as possible in the first half of the 2030s.

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(Translated from Japanese. Banner photo © Pixta.)