Japan Will Subsidize 100 Percent Of Salaries At Small Companies During Coronavirus Pandemic

Japan's actions put pressure on other nations to follow suit as global unemployment continues to rise due to the coronavirus pandemic

Tomohiro Ohsumi / Getty Images

Japan's actions put pressure on other nations to follow suit as global unemployment continues to rise due to the coronavirus pandemic

Japan is reportedly instituting a program that will ensure employees of small businesses that have been closed due to the coronavirus pandemic will still receive 100 percent of their wages. The announcement comes as unemployment numbers across the globe have soared in response to lockdown measures, with an estimated 26 million job losses in the United States alone.

According to Nikkei Asian Review, Japan’s Ministry of Health, Labor and Welfare hopes to extend an existing employment adjustment subsidy to implement the measures.

The current subsidy ensures that temporarily laid-off workers still receive 60 percent of their salary. The Japanese government currently covers 90 percent of that sum, with employers providing the other 10 percent.

The new law will build on the existing program, with the government committing not only to covering all costs, but also ensuring that employees will receive 100 percent of their salaries instead of just 60 percent.

That said, there are some regulations. Businesses that are eligible include those in the service sector with up to five workers and manufacturing companies with a maximum number of 20 employees.

The subsidy will also only apply to institutions that have been asked by the government to close their doors or limit hours during the COVID-19 lockdown measures.

Despite the above parameters, it is nevertheless estimated that the new subsidy will cover around 3 million companies and about 10 million employees.

closed store in japan
  Tomohiro Ohsumi / Getty Images

There have been some other issues that have affected the new program’s popularity, however. Business owners have complained of “complicated paperwork,” in addition to a one-month wait time for processing applications. Because of these obstacles, it’s been reported that fewer than 1,000 companies out of the 3 million eligible have applied so far.

This stands in contrast to similar programs offered in other nations. For example, the fund offering subsidies to small businesses in the United States have been so inundated with requests that it initially ran out of money within just two weeks.

Outcry then grew after it was revealed that a number of large and financially-secure businesses, such as Shake Shack and Potbelly Sandwich Shop, qualified and received money from the program. Both the aforementioned companies have stated that they will be returning the money after public backlash.

Meanwhile, though the Japanese government has taken action to aid small businesses, experts have warned that it must do more to help its overwhelmed healthcare system, which is reportedly on the “brink of collapse” due to the coronavirus pandemic.

As was previously reported by The Inquisitr, doctors have claimed that they have been forced to turn people away from emergency rooms due to the high capacity, and one man reportedly had to visit 80 hospitals before eventually being admitted.