Sluggish wage recovery remains a pressing issue for Japan to tackle as surging living costs hurt households and weigh on consumer spending in the world’s third largest economy.
Japanese Prime Minister Fumio Kishida this week urged firms to accelerate wage hikes that exceed the rate of inflation to prevent stagflation.
Inflation-adjusted real wages, a key indicator of consumer purchasing power, dropped 3.8% in November from a year earlier, according to the labour ministry.
It was the fastest pace of decline since a 4.1% drop in May 2014 and followed a revised 2.9% fall in October. Moreover, real wages were in negative territory for the eighth month in a row due to higher inflation.
The consumer price index the ministry uses to calculate real wages, which includes fresh foods but not owners’ equivalent rent, rose 4.5% in November from a year earlier, the quickest pace of increase since June 1981.
Nominal total cash earnings were up 0.5% in November but the pace of growth slowed from a revised 1.4% gain in October, led by falls in special payments such as bonuses.
Special payments declined 19.2% in November, the biggest drop since January 2021, after a revised 2.9% rise in October.
Industries such as transportation and wholesales showed double-digit falls in special payments, the data showed.
Japanese firms typically pay bonuses in the summer and winter, which tend to be volatile as they reflect changes in profits and the status of the economy.
Meanwhile, overtime pay, a gauge of business activity strength, advanced 5.2% year-on-year in November after a revised 7.7% gain in October.
The following table shows preliminary data for monthly incomes and number of workers in November:
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Payments (amount) (yr/yr % change)
Total cash earnings 283,895 yen ($2,140.50) +0.5
-Monthly wage 269,116 yen +1.8
-Regular pay 249,550 yen +1.5
-Overtime pay 19,566 yen +5.2
-Special payments 14,779 yen -19.2
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Number of workers (million) (yr/yr % change)
Overall 51.721 +1.1
-General employees 35.290 +1.0
-Part-time employees 16.431 +0.9
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The ministry defines “workers” as 1) those who were employed for more than one month at a company that employed more than five people, or 2) those who were employed on a daily basis or had less than a one-month contract but had worked more than 18 days during the two months before the survey was conducted, at a company that employs more than five people.
To view the full tables, see the labour ministry’s website at:
($1 = 132.6300 yen)
Source: Economy - investing.com
