The Japanese government decided to raise the minimum wage in the largest increase since its registration began, given the high inflation registered in the country.
In this way, the minimum wage will reach an average of 1,004 yen (US$6.91) an hour, an increase of 43 yen, exceeding the level proposed by a government commission of 41 yen.
The increase, which will take effect in October, is the biggest since records began in 1978.
Minimum wage levels vary between the various prefectures (departments) of Japan: in Tokyo the rise will be 41 yen, up to 1,113 yen; while Okinawa, the region with the lowest minimum wage, will rise by 43 yen to 896 yen, according to data compiled by the Bloomberg agency.
The decision stems from the persistence of inflation that is relatively high in a country like Japan, accustomed to minimal levels of price increases.
In June, Japan’s Consumer Price Index (CPI) picked up speed again, marking a year-on-year rate of 3.3%.
Meanwhile, the core index – which excludes fresh food and energy prices – fell one tenth to 4.2%, after posting a 40-year record the previous month.
Part of the inflation is explained by the position held by the Bank of Japan (BOJ) which, contrary to other central banks, kept interest rates at low levels, as part of a policy that seeks to take advantage of inflation to raise wages. of the Japanese, stagnant for decades.
However, in the last year wages rose a nominal 2.3%, that is, their purchasing power fell by 1.6%.
This is already being felt in the Asian country’s macroeconomic numbers.
The Japanese Gross Domestic Product (GDP) grew 1.5% in the second quarter, compared to the previous three months, exceeding all expectations.
However, the big driver was foreign trade, with export growth of 3.2%, while domestic consumption – which represents more than half of Japan’s GDP – fell 0.5%.
Source: Ambito
