Japan’s upcoming general election sees political parties vying to raise the minimum wage, a move that could sway voters but also put pressure on the country’s small and medium-sized businesses. Small businesses, which drive the majority of job creation and economic output, are already struggling with rising costs.
Prime Minister Shigeru Ishiba’s Liberal Democratic Party aims to increase the average minimum wage by 42% to 1,500 yen per hour by 2030. Opposition parties have also pledged to raise the minimum wage, sparking concerns from business groups like Keidanren about the impact on companies.
Rising inflation and a labor shortage are key issues in the election, with bankruptcies on the rise. While major companies have offered salary increases to lower-income workers, the discrepancy between Japan’s average annual salary and that of OECD countries remains substantial.
Both politicians and business leaders are discussing ways to mitigate the impact of higher wages, with tax breaks and subsidies being considered. However, small business owners like Takeshi Nishimura fear the challenges of coping with a significant wage increase.
Despite the uncertainties, there is a consensus on the need to address the wage disparity in Japan to benefit millions of workers in the country.
© Thomson Reuters 2024.