Economy

Japan Real Wages Fall at Steepest Pace in 9 Years in 2023

Yomiuri Shimbun file photo
The cityscape of Tokyo

Jiji Press

12:17 JST, February 6, 2024

Tokyo (Jiji Press)—Japan’s inflation-adjusted real wage index fell 2.5 pct in 2023 from the previous year, the steepest decline since the 2.8 pct drop logged in 2014 due to the impact of a consumption tax increase, the labor ministry said in a preliminary report Tuesday.

The index dropped for the second straight year as wage growth failed to outpace inflation although pay increases agreed at “shunto” spring labor-management wage negotiations in 2023 reached their highest levels in 30 years.

Monthly nominal wages per worker rose 1.2 pct to ¥329,859 on average. Of the total, regular pay including basic salary rose 1.2 pct, and overtime and other nonregular pay grew 0.3 pct. Special pay including bonuses increased 2.0 pct.

The consumer price index excluding imputed rent, a measure used to calculate the real wage index, surged 3.8 pct.

Total nominal wages for full-time workers averaged ¥436,849, up 1.8 pct, and those for part-time workers stood at ¥104,570 on average, up 2.4 pct.

Work hours per person were up 0.1 pct at 136.3 hours on average. Regular work hours rose 0.2 pct, while overtime fell 0.9 pct.

In December alone, the real wage index declined 1.9 pct from a year before, the 21st successive month of decrease.