TOKYO (Reuters) – Japanese workers’ real wages fell for a 21th consecutive month in December but at a slower pace, data showed on Tuesday, as inflation eased, but a higher rate of wage growth is needed for the government’s bid to support the economy.
Along with inflation, Japan’s wage trend is closely watched, with the Bank of Japan regarding both indicators among the key data to consider in preparation for phasing out its massive stimulus policy.
Inflation-adjusted real wages, a barometer of consumer purchasing power, fell 1.9% in December from a year earlier, but slowed from a revised 2.5% decline in November, data from the labour ministry showed. It was the slowest pace of decline since June 2023.
The consumer inflation rate the government uses to calculate real wages, which includes fresh food prices but excludes rent or equivalent, slowed to a 3.0% gain, the slowest pace of increase since June 2022, reflecting receding inflationary pressure from raw material costs.
Total cash earnings, or nominal pay, climbed 1.0% for the month, after a revised 0.7% gain in November. Base salary climbed 1.6% in December from a year ago, the highest reading since May 2023.
“We can say real wages in December improved from the previous month and regular salary remained positive territory,” a labour ministry official said.
Overtime pay, an indicator of business activity strength, slipped 0.7% year-on-year, after a revised a 0.2 rise.
Japan’s biggest business lobby Keidanren and trade unions started annual labour talks earlier this month that may pave the way for the BOJ to exit its decade-long super-loose monetary policy.
For the full year, over 40-year-high consumer inflation weighed down on Japan’s real wages, which dropped 2.5%, the biggest decline since 2014 when the nation raised sales taxes.
Nominal wages grew 1.2% last year, slowed down from a 2.0% increase the previous year.
The table below shows preliminary data for monthly incomes and number of workers in December:
—————————————————————-
Payments (amount) (yr/yr % change)
Total cash earnings 573,313 yen ($3,866) +1.0
-Monthly wage 272,612 yen +1.4
-Regular pay 253,116 yen +1.6
-Overtime pay 19,496 yen -0.7
-Special payments 300,701 yen +0.5
—————————————————————-
Number of workers (million) (yr/yr % change)
Overall 52.907 +2.0
-General employees 35.638 +1.5
-Part-time employees 17.268 +3.4
—————————————————————-
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 = 148.2900 yen)
(Reporting by Kaori Kaneko; editing by Miral Fahmy)
Comments