Japan's real wages in May fell 1.4 percent from a year earlier, declining for a record 26th straight month, as the sharpest base wage growth in 31 years was offset by inflation, government figures showed Monday.
The drop in May was larger than a revised 1.2 percent fall in April, with higher material costs and a weakening yen pushing up import costs, data from the Ministry of Health, Labor and Welfare showed.
The downward pressure continued even as the Japanese Trade Union Confederation said last Wednesday that Japanese companies agreed to raise wages by an average of 5.1 percent at this year's spring wage talks, offering a more than 5 percent increase for the first time in 33 years.
The impact of pay increases was seen in nominal wages, with average base pay up 2.5 percent at 263,539 yen ($1,600), the fastest rise since January 1993.
Analysts said the latest data indicated the effect of wage hikes was becoming apparent.
Koya Miyamae, a senior economist at SMBC Nikko Securities Inc., said he expected the impact of the rises in base pay from this year's wage negotiations to become visible around May to July.
"It appears that a ripple effect may have begun," he said.
But a labor ministry official was less confident that real wages would enter positive territory, with growth in the consumer price index, which is used to calculate real wages, remaining well above 2 percent due to higher utility and food costs.
"Nominal pay looks set to increase in the future due to the effects of salary hikes, but without an easing off of price rises it's hard to see real wages turning positive," the official said at a briefing.
Until real pay turns positive, consumer spending will remain tepid despite a series of government measures to address price increases, economists say. The Bank of Japan is aiming to foster a virtuous cycle of inflation and rising wages under its monetary easing policy.
Nominal wages, or the average total monthly cash earnings per worker including base and overtime pay, were up 1.9 percent at 297,151 yen.
It was the 29th consecutive month of increase and the biggest gain since June 2023, ministry data showed.
Average monthly nominal wages for full-time workers were up 2.1 percent at 378,803 yen, while part-time workers saw monthly pay increase 3.2 percent to 108,511 yen.
Total working hours were up 1.2 percent at 137.1.
By industry, monthly pay in the construction sector saw the biggest rise of 7.2 percent, while "compound services" such as postal services saw the sharpest fall of 6.3 percent.
© KYODO
17 Comments
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deanzaZZR
And Kishida is still Prime Minister. This is madness.
Asiaman7
Declining for a record 26th straight month. That’s absurd!
Wage increases for the 16.5% of employees who belong to unions mean nothing for the other 83.5% who continue to endure trivial or no wage increases while battling surging price increases.
JeffLee
Why shouldn’t he be? He doesn’t set our wages, private-sector employers do. The last couple of PMs have been pleading the corporates to hike wages, but they refuse to give any substantive ones. So blame them.
Rivera
J/T really play their own people as dumb sh!!!.
Rivera
The poor get poorer and the rich get richer true to life
daito_hak
He is certainly responsible for the bad political decisions, the bad economy and the inflation. So just stop kissing his bottom you are grotesque.
Speed
My wife's 10 yen per hour increase in pay means absolutely nothing when the price of EVERYTHING we buy at the supermarket has gone up from 30 to 300 yen each.
tora
Was saying that last month when it was reported that wages fell for a record 25th month. Said we'd have 26th months and sure enough here we are. Don't know why I was so heavily downvoted.
And JT get new stock photos of the new banknotes ;)
And finally, as others have said: how is Kishida still doing in office??
tokyo_m
Japan heading for third world status, and the electorate seem to be perfectly happy about it.
dagon
This is trotted out every time and the LDP supplements 85s pleading with some urging and imploring.
Government works by coercion though.
That why the plebes must pay taxes and have no recourse.
But the government can set incentives, targets, like their tax breaks and stimulus to raising wages. And use the stick of penalties if companies choose to keep labor in working poverrty.
But they choose not to and maintain this farce
Government is not fulfilling it's duty as a lever of influence for the people.
owzer
A result of pumping cash into the market. They will continue to devalue what you have.
tigerjane
Sure, the dollar against the yen jumped from 130 to over 160 in a matter of months, therefore, inflation too rose along with this jump and any wage increase a person saw would never match these numbers they couldn't because wage increases have never kept with inflation.
In addition, the government has not increased the minimum wages for how many years, and so, for many who work in the lower end spectrum jobs will forever be struggling because of the lack of empathy by the government in not raising minimum wages.
kurisupisu
Crime seems to be on the rise in my neighborhood.
The local cops were making public announcements, warning people to keep their doors locked.
I wonder if the economic malaise in Japan is causing a rise in crime as it has done in the US and Europe?
kibousha
BOJ is downright criminal
GillislowTier
Lots of companies use the public news of “wages increase by x amount” as their justification for timing prices increases. Even when it only affects less than 40% of the work force. What else can you expect
CKAI
declining for a record 26th straight month,
oh this is fine. just a project map or two away from virtuious turn around… For LOOTERS
Meanwhile Banks got the big guns ready, "Aiming to fosters"?
VIrtuously
Be more UNserious why dontcha.
DanteKH
Please down vote this comment if you think Japan's economy is going down to toilet, Kishida is the worst PM of Japan since Abe the Destroyer, with his Abenomics abominations, and also if you think Japan is fast forwarding to a 2nd World Country, with toilet paper currency due to very obedient and complacent population.
In any other country, like France for example, there would have been mass protests and strikes for the steep downgrade of the living condition.
Shoganai Japan.