Japan's Minimum Wage Competition Heats Up as Businesses Feel the Strain

Japan's minimum wage has become a point of competition among prefectures, with even small increases making a significant difference. Akita Prefecture, previously holding the lowest hourly pay in Japan at 951 yen per hour in fiscal year 2024, raised its minimum wage by 80 yen to 1,031 yen.

This increase was seen as a way for Akita to climb out of last place, but it has also put pressure on businesses. Tomokazu Terada, president of Marudai, which operates five supermarkets in the capital city of Akita, expressed concern that the higher wages are not translating into increased sales.

The national weighted average minimum hourly wage is 1,121 yen, with regional rates ranging from 1,023 yen in prefectures like Okinawa to 1,226 yen in Tokyo. The competition to raise wages has intensified, and all 47 prefectures have seen hourly pay top 1,000 yen.

For workers, the minimum wage is a lifeline that allows them to earn a living. However, for small and midsized businesses, it can be viewed as a labor cost imposed by the government. Marudai experienced some relief when Akita's advisory council delayed implementation of the new minimum wage by about six months.