10% of Japanese companies to hire regular staff after minimum wage increase: survey

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Nearly 10 percent of Japanese companies said they would hire more regular workers, more than three times as many as those who slash them, to cope with the upcoming sharp hikes in the minimum wage across the country, a recent one showed. survey conducted by a credit research company.

The Tokyo Shoko Research survey apparently showed that more employers found it preferable to transfer their workforce to regular, permanent workers, as it would be more expensive for them to employ permanent workers. non-regular staff with a fixed term and paid by the hour.

Participants call for an increase in the hourly minimum wage in Japan to 1,500 yen ($ 13.7) at a rally organized by labor groups on July 13, 2021 in Tokyo. (Kyodo)

The online survey found that 914, or 9.8%, of the 9,278 responding companies said they would hire more regular staff, while 287, or 3.0%, would reduce the number of such workers, when asked about the impact of the minimum wage increase scheduled for October.

Meanwhile, 7,745, or 83.4%, said the increase in the minimum wage would not affect their employment strategy, according to the survey conducted August 2-11. The trend was more noticeable among large companies, as the percentage in large companies was 89.7. percent, compared to 82.3 percent in small and medium-sized enterprises.

The results came after a Japanese government panel in July proposed to increase the average hourly minimum wage in fiscal 2021 from 28 yen to 930 yen ($ 8.5), the highest since fiscal year 2002, when he started using hourly wages to come up with a rough target for increases. .

The proposal was concluded after an intense debate between management and unions, with management fearing that the wage hike would deal another blow to companies already hit by the economic fallout from the coronavirus pandemic.

The sharp wage hikes came after the average minimum wage rose by just 1 yen in fiscal year 2020, as wage hikes could worsen business conditions with the emergence of the pandemic.

Taking into account the proposal and the local economic situations, each of the regional directorates of the Ministry of Labor in the 47 prefectures individually finalized the increase in mid-August.

Tokyo Shoko Research said companies with strong business performance might “turn to hiring more regular employees” instead of hourly workers such as agency and part-time workers, citing the shortage of Japan’s long-standing workforce accompanied by a rapidly aging population.

“The result suggests that more and more companies are changing their minds and attempting to improve productivity per worker through regular, long-term and stable employment, inspired by the increase in the minimum wage,” said Hisashi Yamada, vice-president of the Japan Research Institute think tank.

The Ministry of Labor’s advisory group is meeting on July 16, 2021 in Tokyo on its proposal to increase the average hourly minimum wage in Japan for fiscal year 2021 to 930 yen ($ 8.5). (Kyodo)

Yamada said the possible negative impact of the minimum wage hike on business management does not appear “to be so large overall as more than 80% do not expect any impact”, but warned that Small and medium-sized businesses, which typically hire more non-regular workers, are said to suffer higher labor costs in addition to the fallout from the virus.

“Basically, many mid-sized and small businesses are financially unstable and more vulnerable to a rise in wages, so some kind of supportive measures will be needed given the current virus situation,” Yamada said, proposing to introduce exemptions from rising wages. for sectors affected by the pandemic such as service providers.

The increase in the minimum wage came as Prime Minister Yoshihide Suga pledged to reach an average hourly rate of at least 1,000 yen “as soon as possible” to help non-regular employees earn more and correct the wrongs. pay disparities between them and regular workers.

Japan’s minimum wage ranks fifth among the industrialized countries of the Group of Seven, with the exception of Italy which has no statutory minimum wage, after $ 12.2 in France, $ 12.0 in Germany, $ 11.1 in Britain and $ 10.5 in Canada, according to Organization for Economic Co-operation and Development data for 2020. US is the lowest at $ 7.3.


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