Expert Participation Needed... Proposal for Expert Committee-Centered Operation
Possibility of Differentiated Minimum Wage by Industry Left Open
"Decisions Should Consider Employment Impact and Real Wages"
On May 15, the Ministry of Employment and Labor announced that the Minimum Wage System Improvement Research Group had concluded its activities and submitted a proposal summarizing the results of its discussions. The proposal suggests reducing the number of members in the Minimum Wage Commission, which determines the minimum wage, to 15, and emphasizes the need for an operation centered on expert committees. It also states that, rather than relying on a formula-based approach to determine the minimum wage, it is necessary to consider reliable statistics and a wide range of economic and social conditions.
The research group was launched in November last year to discuss major issues and improvement measures regarding the minimum wage decision system. Nine current and former public interest members of the Minimum Wage Commission participated, and the proposal reflects the results of ten research meetings and workshops, as well as feedback collected from labor and management organizations, experts, and stakeholders in the field.
To create a structure that allows for reasonable debate and deliberation, the research group proposed reducing the size of the Minimum Wage Commission from 27 members?composed of nine representatives each from workers, employers, and public interest members?to 15 members. At this time, the group suggested both an "expert-centered approach," in which only experts selected through tripartite discussions participate, and the "current tripartite approach" (five representatives each from workers, employers, and public interest members) as options for forming the commission.
To enhance the expertise and efficiency of minimum wage deliberations, the group identified strengthening the function of expert committees as a key improvement measure. The proposal recommends integrating the current Wage Level Expert Committee and the Living Expenses Expert Committee into a single "Wage Level Expert Committee," and establishing a new "System Improvement Expert Committee," so that the Minimum Wage Commission would operate primarily through these two expert committees. The group also believes that contentious issues such as the application of minimum wage by industry and the application of minimum wage to subcontracted workers should be addressed by these expert committees.
In the proposal, the research group stated, "Given the current economic structure, the scope of minimum wage coverage, and the impact and effectiveness of the system, it would be difficult for the Minimum Wage Commission to define the need for differentiated application by industry and to determine the appropriate minimum wage level and its targets."
However, the group added, "If labor and management reach an agreement at the industry level to set wage levels and request that these be recognized as the statutory minimum wage, the Minimum Wage Commission could consider reviewing and deciding whether to approve differentiated application." In this case, they stressed that "clear, reasonable grounds and objective statistics supporting the need for differentiated application must be prepared."
The research group also proposed that, rather than maintaining a formula as the standard for minimum wage decisions, it would be preferable to use a variety of indicators. This includes commonly used economic and labor market statistics such as economic growth rate and inflation rate, as well as factors that actually affect wages, such as the impact on employment and workers' living expenses.
The group noted, "A method that strictly considers only the criteria set by law could weaken the competitiveness of the system," and emphasized, "While economic indicators should be considered, it is necessary to grant the Minimum Wage Commission discretion to make decisions based on a comprehensive review of various economic and social conditions."
The Ministry of Employment and Labor stated, "Going forward, we will widely gather opinions from labor, management, and other stakeholders based on the research group's proposal and previous discussions on system improvement," and added, "We plan to pursue reasonable and widely accepted improvements to the system through sufficient social dialogue."
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