(Bloomberg) -- Japan's labor ministry is proposing a record increase in the minimum hourly pay that will push the rate to above 1,000 yen ($7.08) for the first time and help low-income households tackle inflation.
An advisory panel at the ministry is seeking a boost in the national average of 41 yen, or 4.3%, to 1,002 yen for this fiscal year, according to a statement on Friday. If realized, that will be a record hike both in absolute and percentage figures since the government began using hourly pay as the benchmark in 2002.
Inflation in Japan has outpaced a rise in wages. Overall cash earnings for all workers rose 2.5% in May, but fell 1.2% when adjusted for inflation.
Analysts see a steady wage hike of 3% as necessary to keep inflation above the Bank of Japan's 2% target in a sustainable manner. On Friday, the central bank raised its inflation forecast for this fiscal year to 2.5%, from 1.8% in April. Still, it decided to continue with monetary easing as inflation is expected to ease below 2% in the following two years.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
