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Wednesday, Aug. 15, 2012
The minimum wage dilemma
The number of people receiving livelihood assistance known as seikatsu hogo (literally, livelihood protection), Japan's final social safety net, increased for nine consecutive months and reached a record 2,108,096 as of March 2012.
According to the health and welfare ministry, the number of people on welfare rose by about 86,000 in the past year.
On July 25, a subcommittee of the Central Minimum Wages Council, an advisory body for the health and welfare minister, decided to raise minimum wages nationwide by an average ¥7 to ¥744 an hour in fiscal 2012.
But in 11 prefectures, after-tax income from minimum wages is lower than the monthly livelihood assistance.
This situation could lead many people to give up seeking for jobs and instead choose to live on welfare. The government should give serious thought to this situation and remember that one of its most important duties is to adopt economic policies that will help ensure employment for every citizen.
The number of households on welfare in March stood at 1,528,381, an increase of 6,897 from February. Of these households, 660,726 were mainly composed of people aged 65 years or older, accounting for about 40 percent of the total households on welfare.
Attention also must be paid to the fact that 260,945 households on welfare are officially classified as "other households," not including households of elderly people, mother-and-child households, households of disabled people and households of invalid people.
These households account for about 17 percent of the total households on welfare and include relatively young jobless people. Among them are temporary workers whose work contracts were terminated after the 2008 Lehman Brothers shock.
Temporary workers now account for nearly 40 percent of Japan's workforce. Their wages are low and their employment situation is unstable. This has led many young people to remain unmarried. Even if they are married, many of them give up having children. This will have an undesirable demographic effect.
On the other hand, the total cost of livelihood assistance has been increasing and is expected to reach ¥3.7 trillion in fiscal 2012. In fiscal 2010, people on welfare received ¥12.8 billion illegally.
The government should earnestly publicize the support system for job seekers under which they can receive ¥100,000 a month while receiving vocational training if they meet certain conditions.
The government has a plan to raise minimum wages to ¥1,000 an hour by 2020. But forcing the policy may result in reducing job opportunities. The government must seriously tackle the difficult task of raising minimum wages while taking care not to reduce employment.
The government's overall goal should be to pursue a policy that will enable people to live a decent life through wages from work and then through pension after retirement. But it should not opt to reduce livelihood assistance benefits.