TOKYO (Reuters) – Japan’s real wages in August declined for a 17th month, government data showed on Friday, as persistent price hikes continued to outpace salary growth.
Global financial markets closely follow wage trends in the world’s third-largest economy as the Bank of Japan emphasises sustainable wage rises as a prerequisite for deciding whether and how to dismantle its ultra-loose monetary stimulus.
Inflation-adjusted real wages, a barometer of consumer purchasing power, fell in August by 2.5% from a year earlier following a revised 2.7% drop in the month before, data from the Ministry of Health, Labour and Welfare showed.
The consumer inflation rate officials use to calculate real wages, which includes fresh food prices but excludes owners’ equivalent rent, slowed down to 3.7%, the lowest in 11 months. But nominal pay growth in August was 1.1%, unchanged from July after a downward revision and weaker than in June and May.
Prime Minister Fumio Kishida said last week he would submit an extra budget to this month’s extraordinary parliamentary session that would fund a new economic stimulus package to help households ease the pain of price hikes and boost wages.
Special payments dropped 5.4% year-on-year in August, the last month of the summer bonus season, marking the biggest fall since January 2021. A labour ministry official attributed the decline to more firms offering the bonus payment earlier this year, reflected in a 0.6% uptick in July and a 3.5% rise in June.
Base salary growth in August climbed by 1.6% year-on-year, from a revised 1.4% gain in the previous month, the data showed.
Overtime pay, a gauge of business activity, increased in August by 1% year-on-year, after a revised 0.0% in July.
The table below shows preliminary data for monthly incomes and number of workers in August:
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Payments (amount) (yr/yr % change)
Total cash earnings 282,700 yen ($1,898.59) +1.1
-Monthly wage 270,082 yen +1.6
-Regular pay 251,463 yen +1.6
-Overtime pay 18,619 yen +1.0
-Special payments 12,618 yen -5.4
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Number of workers (million) (yr/yr % change)
Overall 52.496 +1.8
-General employees 35.728 +1.6
-Part-time employees 16.768 +2.0
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The labour ministry defines “workers” as 1) those employed for more than one month at a company that employs more than five people, or 2) those 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 = 148.9000 yen)
(Reporting by Satoshi Sugiyama and Kantaro Komiya; Editing by Christian Schmollinger)
