OSAKA - Osaka Prefecture's minimum wage will rise to 1,231 yen per hour in October, providing welcome relief to part-time workers struggling with higher living costs while placing growing financial pressure on businesses, some of which are responding by reducing employee hours and introducing robots that can perform certain tasks for the equivalent of just 94 yen an hour.
Minimum wages are set to increase by more than 50 yen across the Kansai region, reflecting the government's push to raise earnings as prices continue to climb. However, interviews with supermarkets, restaurants and other employers reveal that the rapid increases are also accelerating changes in hiring practices, with some businesses reducing their reliance on human workers.
Japan's national average minimum wage stood at 668 yen in 2005 but has risen by approximately 1.7 times over the past two decades, reaching 1,121 yen last year. Since the government established a target in 2023 of raising the national average to 1,500 yen, annual increases of around 50 yen have become increasingly common.
Across the two prefectures and four other prefectures of the Kinki region, as well as neighboring Tokushima Prefecture, minimum wages are scheduled to rise by an average of approximately 56 yen from October onward. Osaka will become the third prefecture to enter the 1,200-yen range, following Tokyo and Kanagawa.
The increases are intended to strengthen household purchasing power, particularly as rising food, energy and other everyday expenses continue to squeeze family budgets. For workers receiving hourly wages, even relatively small increases can make a noticeable difference.
At a supermarket in Osaka, 76-year-old part-time employee Okumoto has worked for 15 years, reporting for duty six days a week and handling food preparation, packaging and stocking in the fresh fish section.
Her current hourly wage of 1,190 yen will rise to 1,240 yen in October, an increase of 50 yen. Working approximately three hours a day, she expects her monthly earnings to increase by around 4,000 yen.
"It's the first time I've earned more than 1,200 yen an hour," Okumoto said, explaining that she has held various part-time jobs over the years but has never previously reached that level.
She welcomed the increase with a smile, saying the extra income might allow her to enjoy a few small luxuries.
For the supermarket operator, however, the wage increase presents a considerably different financial picture.
A representative explained that an increase of just over 50 yen in the minimum wage would add more than 10 million yen to the company's annual personnel expenses.
The additional burden comes at a time when businesses are already struggling with higher operating costs. As labor expenses continue to climb, profit margins are being gradually eroded, putting operating earnings under increasing pressure.
Restaurants face similar difficulties, particularly in Osaka's highly competitive food service market.
At a restaurant popular with baseball fans in central Osaka, management plans to increase part-time employees' hourly wages by approximately 50 yen in October. However, deciding whether to pass the additional labor costs on to customers remains a major challenge.
"Price competition is quite intense, so we don't really have the confidence to raise our prices when other restaurants aren't doing so," a representative said.
According to research by Teikoku Databank, fewer than 40% of businesses have been able to pass rising expenses, including personnel costs, on to their customers through higher prices.
Many supermarkets and restaurants have consequently been forced to absorb additional costs rather than risk losing customers.
The Osaka restaurant has managed to maintain its beer price at 450 yen per glass since opening three years ago, despite repeated increases in operating expenses.
Management noted that around 20 years ago, part-time employees commonly earned approximately 800 yen an hour, while draft beer cost around 500 yen. Today, hourly wages have climbed to around 1,200 yen, but customers still expect to pay roughly the same amount for beer.
Rather than immediately raising menu prices, the restaurant is considering shortening employee shifts, including asking part-time workers to finish earlier when customer demand allows.
The pressure to contain personnel expenses is also accelerating the adoption of automation, with some businesses already reducing staffing levels.
At a ramen restaurant in Hyogo Prefecture, four employees typically operate the establishment during the daytime, with two working in the kitchen and two serving customers.
After 8 p.m., however, one of the floor staff finishes work, leaving a single employee responsible for serving customers even while the restaurant remains busy with dinner orders.
The business has introduced a serving robot to help cover the staffing gap. Once dishes are placed on the machine, it automatically transports them to customers' tables, allowing the remaining employee to concentrate on other duties.
The restaurant initially adopted the robot during the COVID-19 pandemic, replacing one employee on the particularly expensive late-night shift.
The decision has helped the business maintain the price of its signature ramen in the 800-yen range, despite industry concerns that ramen shops face increasing difficulty maintaining profitability without charging more than 1,000 yen per bowl.
"Personnel costs rise after 10 p.m., so having this robot handle serving duties is more helpful for the restaurant than employing another part-time worker," a representative said.
According to the robot's distributor, the machine is available through a five-year lease costing 34,100 yen per month.
If operated for 12 hours a day over 30 days, its lease expense works out to the equivalent of approximately 94 yen per hour, a fraction of the cost of employing an additional worker at the minimum wage.
Although the robot can currently deliver only certain menu items, the restaurant says introducing automation has helped reduce its monthly personnel expenses by approximately 560,000 yen.
The company is now considering introducing similar machines at its other locations.
Economists say the shift toward automated services is not limited to serving robots. Restaurants and retailers are increasingly adopting touchscreen ordering systems and other labor-saving technologies as businesses seek ways to operate with fewer employees.
One expert cited empirical research from the United States indicating that a 10% increase in the minimum wage is associated with an approximately 8% increase in the likelihood of companies adopting robots.
The research suggests that replacing some human tasks with automated systems is a broader international response to rising labor costs.
However, the expert also warned that increasing minimum wages too rapidly could contribute to business failures and job losses, particularly among companies unable to improve productivity or pass higher expenses on to customers.
Others argue that Japan's more fundamental economic challenge is not the potential disappearance of jobs but a worsening shortage of people available to fill them.
Japan's wages remain relatively low compared with those in other advanced economies, making the country less attractive to overseas workers, particularly given the weak yen and intensifying international competition for labor.
During a visit to Germany three years ago to investigate labor shortages, an observer found that a bakery near a railway station in a regional city was offering part-time employees an hourly wage equivalent to approximately 2,600 yen.
The example illustrates the growing wage gap Japan faces as developed economies compete for workers against a backdrop of declining birthrates and aging populations.
Research by the Recruit Works Institute suggests that Japan could face a labor shortage of approximately 11 million workers by 2040.
Under those conditions, businesses may increasingly face closure not because wages are too high, but because they cannot recruit enough employees to continue operating.
Automation is therefore expected to play a growing role in addressing labor shortages, alongside wage increases and improvements in business productivity.
Economists also emphasize the importance of allowing companies to reflect rising labor expenses in their prices. Higher wages can strengthen household purchasing power, enabling consumers to absorb some increases in the cost of goods and services while supporting business revenue.
Such a cycle, in which companies maintain profitability, raise employee compensation and invest in productivity, could help sustain economic growth.
For employers already operating on narrow margins, however, the immediate challenge remains finding enough money to pay higher wages without losing customers or cutting jobs.
As Osaka's minimum wage enters the 1,200-yen range for the first time, the contrasting experiences of workers welcoming larger paychecks and businesses turning to shorter shifts and automated services highlight the increasingly difficult balance between improving incomes and preserving employment.
Source: KTV NEWS
