Prime Minister Yoshihide Suga's plan to boost the minimum wage is facing stiff opposition from small and midsize firms worried about their survival during COVID-19, and from lawmakers in his own ruling party amid concerns of a political backlash.
Suga said last month the government aims to raise Japan's minimum wage, among the lowest in the Group of Seven economies, to ¥1,000 an hour from ¥902 "more quickly." Suga believes the hike would help support households hit by COVID-19, boost competitiveness and spur inflation, according to government sources.
But smaller firms, which employ seven out of ten workers in Japan, have lobbied to scrap the plans. Some of Suga's own Liberal Democratic Party (LDP) lawmakers are also pushing back amid concerns they could lose support from business owners in an election year, government and party sources said.