Prime Minister Shigeru Ishiba wants Japan to have a ¥1,500 minimum wage before the decade is out, greatly accelerating current plans.

He shared the ambitious target during a news conference after he became prime minister on Tuesday.

Japan’s current average minimum wage is ¥1,055 per hour.

This year, the rate was upped by a record 5.1%. To achieve Ishiba’s target, increases of over 7% a year would be needed, which economists say would be a challenge.

Last year, the administration of Prime Minister Fumio Kishida set a goal of ¥1,500 an hour by the mid-2030s, but Ishiba moved up the deadline.

“I think the government is getting ahead of itself with the new goal,” said Shinichiro Kobayashi, chief economist at Mitsubishi UFJ Research and Consulting.

“When it comes to whether it can really be achieved, there is a question of whether small and midsized companies can keep up with the pace of the pay increases.”

For the past few years, minimum wage increases have been generous to help workers keep up with inflation, with annual shuntō (spring labor negotiations) with larger companies leading the way.

Smaller enterprises have been struggling to keep up.

According to a survey by the Tokyo Chamber of Commerce and Industry released in February, 65.7% of the smaller companies surveyed said that the minimum wage at that time was already hitting them financially.

If the pace of the minimum wage increases accelerate, many small and midsized companies that rely on part-timers might not be able to hire people, Kobayashi said.

Ishiba did not specify how the government plans to achieve the bold target.

The goal to achieve a ¥1,500 minimum wage by the end of the 2020s was included in Ishiba’s policy platform for the Liberal Democratic Party presidential election, which took place last week. Some analysts argue that he may have had a political motive, promising faster increases to attract voters.

Kobayashi added that the pace of wage increases depends on the level of inflation, saying if inflation falls, companies would not necessarily need to offer generous raises.

“It's all about balance. The goal should be to achieve a good balance between corporate earnings, price increases and wages increases,” he said.

While the impact on smaller enterprises is concerning, some business leaders have called for an acceleration of minimum wage increases.

Takeshi Niinami, who chairs the Japan Association of Corporate Executives, or Keizai Doyukai, has proposed getting to a ¥1,500 minimum wage in three years. This will help bring hope to people that wages will continue to rise, he argues.

The Japanese Trade Union Confederation, known as Rengo, is seeking a minimum wage of ¥1,600 to ¥1,900 by 2035.

Every summer, a labor ministry minimum wage panel, with representatives from labor and management and outside advisers, proposes a target for the hourly wage. Based on the target, each prefecture determines its local minimum wage starting in October.

The current national average is ¥1,055, with the highest being ¥1,163 in Tokyo and the lowest at ¥951 in Akita Prefecture.

Ishiba has said he will basically adopt the economic policies promoted by the Kishida administration.

The new prime minister's top priority is to make sure Japan brings a close to decadeslong deflation with wage increases that beat price increases.