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2022 January 12 - 18 TOP3 [LABOR]

Minimum hourly wage hike to 1,500 yen would increase Japan’s GDP by 22.5 trillion yen: Labor think tank

The Japan Research of Labor Movement (Rodo-soken) on January 14 released a policy proposal for the 2022 “shunto” spring wage offensive which indicated that a minimum wage increase to 1,500 yen an hour would boost Japan’s GDP by 22.5 trillion yen.

Rodo-soken, a labor think tank working closely with the National Confederation of Trade Unions (Zenroren), in its proposal pointed out that the major factor for the ultra-long-term stagnation of the Japanese economy is that under 20 years of neoliberal policies, large corporations increased their internal reserves to 704.3 trillion yen (as of 2020) while workers experienced wage declines.

The labor think tank stressed that the use of just a small portion of corporate internal reserves would improve working conditions drastically and thus Japan’s economy would be able to get back on a recovery track.

According to the Rodo-soken proposal, with the use of 2.8% of the 704.3 trillion yen in corporate internal reserves, a monthly wage hike of 25,000 yen, Zenroren’s target in this year’s wage bargaining, would be achieved, pushing up the nation’s GDP by 16.27 trillion yen. The use of 2.98% would realize a minimum hourly wage raise to 1,500 yen, leading to a 22.5 trillion yen increase in GDP. Furthermore, Rodo-soken pointed out that if 2.14% of 704.3 trillion yen is used to eradicate unpaid overtime, guarantee workers their right to take their annual paid leaves in full, and fully implement a 5-day work week, it will contribute to boosting Japan’s GDP by 12.41 trillion yen.

Rodo-soken also pointed out that together with a minimum hourly wage hike to 1,500 yen and the eradication of unpaid overtime, the offering of full-time positions to non-regular workers will help increase the average wage of workers to the peak level it held in 1997. The Labor Ministry’s monthly labor survey data shows that the average monthly earnings peaked at 371,670 yen in 1997 and decreased to 318,405 yen in 2020.