TOKYO - From October, Japan’s minimum wage will rise across the country to exceed 1,000 yen for the first time, a development welcomed by workers but one that is expected to squeeze retailers such as discount supermarkets where higher personnel costs could lead to losses.
In Saitama Prefecture, a discount supermarket had a line of more than 30 people waiting before opening, with shoppers seeking bargains such as tofu priced at 42 yen, instant noodles at 117 yen, and six-packs of precooked rice for 430 yen. Customers described the prices as the lowest in the area.
The store maintains its low prices by streamlining operations, including stacking items so that when products run out they can simply be flipped to appear restocked, placing drinks on shelves still in cardboard boxes, and selling cup noodles directly from transport carts. “By pursuing efficiency, we have cut our workforce in half and reduced labor costs,” said Seiya Higashimoto, manager of Mammy Plus in Musashi-Urawa.
In Saitama, the hourly minimum wage will rise from 1078 yen to 1141 yen, while the nationwide average increase is 66 yen, the sharpest since the current system began. For the first time, all prefectures will set the hourly rate above 1000 yen.
The driving forces behind the rise include prolonged inflation and unusual political intervention. Yamanashi Governor Kotaro Nagasaki warned that disparities with neighboring prefectures could accelerate population outflows, spurring a “wage hike competition” among regions as governors themselves pressed for increases.
While the increase brings higher income for workers, analysts caution that rapid wage hikes could drive some retailers, particularly supermarkets reliant on part-time staff, into deficit. “Simply put, companies unable to raise their ability to pay wages will be forced out,” said Takahiro Kazehaya, senior analyst at UBS Securities, stressing the need to improve efficiency rather than depend on low-cost labor.
The government aims to raise the minimum wage to 1500 yen within five years, but whether that goal can be met depends on businesses finding more productive ways of working.
Source: TBS
