Economy

Japan Real Wages Drop at Fastest Pace in 9 Years in FY 2023

Yomiuri Shimbun file photo
The Health, Labor and Welfare Ministry in Tokyo

Jiji Press

16:57 JST, May 23, 2024

TOKYO (Jiji Press) — Japan’s inflation-adjusted real wages fell 2.2% in fiscal 2023 from the previous year, logging the sharpest decline in nine years due to rising prices, the labor ministry said Thursday.

Real wages marked a second straight year of decline in the fiscal year that ended last March as pay increases failed to keep pace with inflation. The 2.2% decline was the largest since fiscal 2014, when real wages fell 2.9% as a consumption tax increase pushed up prices.

Nominal monthly wages rose 1.3% to ¥332,533 on average, gaining for three years in a row. The consumer price index excluding imputed rent, a measure used to calculate real wages, climbed 3.5%, a second straight year of increase of over 3%, after a weaker yen and higher crude oil prices pushed up prices for a wide variety of products.

On a nominal basis, regular pay including basic salary grew 1.3%, while overtime and other nonregular pay fell 0.3%. Special pay including bonuses gained 1.6%.

Overall nominal wages for full-time workers averaged ¥438,696, up 1.7%. The average for part-time workers went up 2.4% to ¥105,989.