ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailMenu BurgerPositive ArrowIcon PrintIcon SearchSite TitleTitle ChevronIcon Twitter
Economy

Spike in wage pressure to hit Japan where it hurts

A part-time worker at a supermarket in Tokyo.

TOKYO -- A confluence of economic and policy forces is expected to boost part-time wages sharply in Japan this autumn, forcing employers to confront the prospect of paying at least 1,000 yen ($9.68) an hour for such help -- if they can find it.

An expanded contribution requirement for social insurance and the largest-ever increase in the average minimum wage both take effect in October, when wages typically rise in tandem with demand for part-time workers ahead of the year-end holiday season.

Choosing to work less

Part-timers earning less than 1.3 million yen annually have been exempt from payments into the national health insurance and pension programs. Some even adjust their working hours to remain so.

But starting in October, previously exempt workers will be required to pay if they meet certain conditions, such as working at least 20 hours a week at a company with 501 or more employees and earning at least 1.06 million yen a year.

For some earning close to 1.3 million yen now, the logical choice will be to work fewer hours rather than see their take-home pay fall. A 54-year-old Tokyo supermarket employee said she will shorten her work hours from 25 a week to 16. Though she will miss the extra income, she also has family members to care for, the woman said.

Inageya, which runs the supermarket where she works, said that roughly one in four part-time employees will be affected by the social insurance policy change, with 53% of them planning to reduce their working hours.

The labor ministry estimates 250,000 workers will be affected. Most of them will be married women, since students are exempt.

For employers, which split social insurance contributions with employees, the expansion will increase costs. But "there is also a lot of concern being expressed about being unable to find help," said Kuniko Usagawa, head of the Jobs Research Center at Recruit Jobs, a staffing company.

Supermarkets, restaurants and other businesses that tend to employ many housewives as part-timers are issuing more help wanted ads. But even other companies such as manufacturers and big-box stores are likely to get serious about coping in the fall, said DIP, which operates a job listing site. More competition for fewer workers puts upward pressure on wages.

Difficult math

Meanwhile, the nationwide average minimum wage will rise 25 yen an hour to 823 yen in October, the labor ministry said. As of June, 16% of job openings on Intelligence's part-time employment site "an" had asking wages below the new rates taking effect in October. This was true for 35% of sales positions.

The pressure to raise wages will be felt more strongly in small-town Japan, where little difference exists between local wage floors and actual hourly rates for low-paying jobs. On "an," asking wages for around 30% of job postings on the northern island of Hokkaido were below the new minimum. Local convenience store operator Secoma said that more than half of its part-time workers earn less than that amount.

Higher minimum wages mean fast-food restaurants and other businesses open 24 hours a day will have to pay bigger premiums to overnight workers relative to daytime staff. Pay for event staff -- demand for which rises during the summer and at year-end -- also tends to hew closely to the minimum wage, according to a Tokyo staffing company.

Japan's chronically understaffed child-care centers and nursing homes often use part-timers for tasks that do not require special qualifications. Many of these workers already earn more than the minimum wage. But "in the long term, competition from other sectors is going to make it harder and harder to find help," said Nisso Net, an Osaka provider of care worker staffing.

Asking wages for part-time jobs in the greater Tokyo, Nagoya and Osaka areas continue to rise. The average climbed 2% on the year in July to 987 yen, according to Recruit Jobs, which predicts the figure could top 1,000 yen by December.

"Ideally, we should be seeing efforts to add more value to products or raise prices in line with rising wages," said Tatsuya Uedo, editor-in-chief of "an."

But with consumer spending sluggish, retailers and restaurants are struggling just to stay even with the competition. Even a resurgence of deflation has entered the realm of possibility. And when companies cannot easily raise prices, they have no choice but to absorb cost increases.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Get Unlimited access

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends October 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to the Nikkei Asian Review has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media