Japan's real wages in June fell 1.6 percent from a year earlier, declining for the 15th straight month, as salary increases failed to keep up with accelerating inflation, government data showed Tuesday.
The drop in inflation-adjusted wages reflected higher food, energy and other prices on the back of Russia's war in Ukraine, offsetting the impact of the sharpest growth in 30 years at this year's pay negotiations.
Nominal wages, the average total cash earnings per worker, including base and overtime pay, rose 2.3 percent to 462,040 yen ($3,200), increasing for the 18th consecutive month, according to the Ministry of Health, Labor and Welfare.
"We will likely see the effect of wage increases by companies gradually," a labor ministry official said.
Major Japanese companies offered wage hikes of 3.58 percent on average at annual wage negotiations earlier in the year, the highest increase in three decades, in the face of repeated calls by Prime Minister Fumio Kishida for pay rises to cope with inflation.
Consumer inflation, however, accelerated by more than 4 percent at one stage this year and remains above 3 percent. The internal affairs ministry said last month that the rate was up 3.3 percent from a year earlier, driven by surging food and household goods prices.
Separate data showed inflation continued to pressure consumption in June, with the nation's household spending in that month down 4.2 percent from a year earlier, declining for the fourth consecutive month.
Households of two or more people spent an average of 275,545 yen, the Ministry of Internal Affairs and Communications said. On a nominal basis, household spending fell by 0.5 percent.
By category, spending on furniture and home appliances such as air conditioners and washing machines plummeted 17.6 percent from a year earlier, while medical care expenditures plunged 8.5 percent, according to the internal affairs ministry.
"The removal of COVID restrictions by the government led to a decline of stay-at-home demand...at a time when prices are increasing," an internal affairs ministry official said.
In May, the country downgraded the legal status of COVID-19 to the same category as seasonal influenza, marking a major shift in its approach after three years of dealing with the novel coronavirus.
© KYODO
24 Comments
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Zoroto
But corporate profits are at all times high, and the PM is jet-setting from junket to junket.
Everything that matters is well.
YankeeX
The BOJ has proved that MMT does not work.
dagon
MMT could be used to subsidize wages and create broad based prosperity.
Instead QE is a basic income for the Japan Inc. investor class.
https://www.cnbc.com/2013/12/18/qe-the-greatest-subsidy-to-the-rich-ever.html
By LDP design.
sakurasuki
Wage increase 3.58%, inflation 4% so that mean their wage still decreasing for buying things, even with wage increase.
Sanjinosebleed
Except for the TEPCO execs…..
u_s__reamer
They've got our cake and eatin' it.
Sven Asai
Considering that an estimated half of population not even has any or insufficient income or employment wages and therefore also not any increase, for example kids, students, selfemployed or small business, seniors, sick, disabled and unemployed people and so on, the raises would have to be at least double the inflation rate, if someone expects a balancing out and drippling through to the poorest, to manage the negative inflation effects on average. We are very far from those more than double increases, even most of the employees in wealthier or big player companies. So in fact we don't need to discuss those low level and fake ' increases ', as they are only cementing the average downturn.
wanderlust
And remember packaging and portions of foods and drinks are getting smaller, as makers seek to control costs and maintain profits.
Tim Sullivan
Kishida thinks the serfs will be impressed when the minimum wage rises to (drum roll) 1,000 yen! Japan is only 40 years behind everyone else in this area -- I guess that is some sort of achievement.
diagonalslip
15th YEAR, I wouldn't be surprised.....
nosuke
Food is for the rich,l only now. Meat being replaced by bugs so only the rich/elites have access to meat in the future.
The inflation is only going to get even worse.
nosuke
Food is for the rich only as of now
Tim Sullivan
Food is for the rich only as of now
Have you seen the 1973 movie Soylent Green? It's worth tracking down online:
"By 2022, the cumulative effects of overpopulation and pollution have caused ecocide, leading to severe worldwide shortages of food, water, and housing. New York City has a population of 40 million, and only the elite can afford spacious apartments, clean water, and natural food. The homes of the elite are fortified, with security systems and bodyguards for their tenants. Usually, they include concubines (who are referred to—and used as—"furniture"). The poor live in squalor, haul water from communal spigots, and eat highly processed wafers: Soylent Red, Soylent Yellow, and the latest product, far more flavorful and nutritious, Soylent Green"
falseflagsteve
Tim
Blinding film that innit. Mind you on this site today there are articles about pods where people can sleep standing up and restaurants selling bugs for dinner. We are getting there fast sadly.
Mark
""Separate data showed inflation continued to pressure consumption in June, with the nation's household spending in that month down 4.2 percent from a year earlier, declining for the fourth consecutive month""
Yup, when the going gets tough the tough zips his wallet, people have to survive.
shogun36
Oh really?? What a shocker.
What are they going to tell us next?
August will be a very hot month?
Otani will continue to be great, while the Angels stink?
Kishida will fly to even more countries, using even more tax payers money to fund such pointless activities?
How about telling us some NEW information? Useful information?
ClippetyClop
If I had asked you yesterday by how much real wages had fallen in June, and for how many straight months they had fallen, could you have told me?
There seems to an obsession on JT with politicians flying in planes instead of, presumably, by sailboat or SUP.
Abe234
Well, all those advocating for more INFLATION might not realize companies may not increase worker's salaries to match or beat inflation so they are poorer. In the meantime shareholders are getting richer. I think countries/governments want inflation to lower the national debt ratio over that 30-year time. They say we don't want to pass debt down to the next-gen but that is what they do anyway, I'm still waiting for my own country to be "DEBT FREE". Oh, how many decades have they kept saying the same old excuse?
JohnnyTheWad
Flying sailboats!!!!
Eastman
its enough if LDP gov sending our money to Kiev junta instead of helping of own taxpayers.
who cares about us right?all we need is to obey their imposed rules,work,pay taxes,get less and less and pay for food and living costs more and more.
but Mr.JTB will travel out of here everytime he wants and no one gives you a .uck
opheliajadefeldt
I bet the wages of government minister/politicians and officials have not suffered. And of course all the poor CEO's who have been struggling for years making record profits and bonuses for their share holders. And of course we not forget the hard up billionaires who have added countless billions to their personal wealth during Covid. And we know, all these people have only the common working people in mind.
Wandora
Serious question for those fluent in macroeconomics, which is a blind spot for me: if prices keep on rising and wages do not, won't the lack of demand not bring prices back down?
opheliajadefeldt
Real wages have not risen in the UK and USA for over a decade.
tttccc111
If not, where does the profit of corporation come from?
Japan workers are the best