Survey of Corporate Attitudes Towards Revision of Minimum Wage (2018)
Minimum hourly wage of 975 yen upon initial hire exceeds minimum wage by 101 yen
— In addition to wage increase implemented in 80% of companies, salary structure reviewed in over 40% of companies —
The minimum wage will be revised between October 1 and mid-October 2018. The revision of the minimum wage for FY2018 was the highest increase since 2002 when the minimum wage was decided based on the hourly wage, while the Japanese government is aiming to raise the minimum wage at an annual rate of 3%, to a national weighted average of 1,000 yen according to “Future Investment Strategy 2018” (Growth Strategy), and “The Basic Policies for Economic and Fiscal Management and Structural Reform 2018” (Basic Policies), etc. Because of this, consumer spending is expected to be revitalized by increased incomes, while there are growing concerns about a deterioration in corporate earnings due to rising personnel costs.
Teikoku Databank has conducted a survey of corporate attitudes towards a minimum wage increase.
This survey was conducted in conjunction with the September 2018 TDB Trends Research. The survey about revision of the minimum wage is the 3rd survey after those of October 2007 and September 2016.
*Survey period: September 13 - September 30, 2018; Companies Surveyed: 23,101; Valid Responses: 9,746 (Response Rate: 42.2%).
*Details of this survey can be found on the dedicated Economic Trend Survey HP. (http://www.tdb-di.com).
Primary points of survey results(summary)
- 1 44% of companies “have reviewed (are considering)” their own salary structures in response to the revision of the minimum wage, and 40% of companies “have not reviewed (are not considering).” Compared to the results of September 2016, the percentage of companies that have reviewed increased by 9.0 points. Revision of the minimum wage has become an opportunity to review salary structure more than before.
- 2 The lowest hourly wage upon initial hire is approximately 975 yen, which is 101 yen higher than the national average minimum wage of 874 yen. Wages are in the range of 1,000 yen for “Service,” “Construction” and “Real Estate” by industry, and “Tokyo,” “Kanagawa” and “Osaka” by prefecture.
- 3 With respect to the increase in the minimum wage at this time, companies replying “reasonable” had the highest number, at 43.8%, which far exceeded those that replied “low” (15.2%) or “high” (13.7%). However, more than half of the companies, at 54.6%, replied “no” effect on consumption recovery. Those companies that replied “yes” stayed at 9.0%.
- 4 83.1% of companies implemented a wage increase in 2018. Companies that did not increase wages stayed at 12.0%. For details, “regular pay raise” was the largest number at 62.2%, and one in three companies implemented a “bonus (lump-sum allowance)” (36.4%) or a “pay-scale raise” (33.4%).