Real Wages Up for 1st Time in 27 Months

Jiji Press

17:16 JST, August 6, 2024

TOKYO (Jiji Press) — Japan’s inflation-adjusted real wages grew for the first time in 27 months in June, the labor ministry said Tuesday.

The real wage index rose 1.1 % from a year before, reflecting higher base salaries following large wage hikes agreed on during this year’s “shunto” spring wage negotiations. Another positive factor was increased bonuses on the back of rosy corporate earnings.

The turnaround in real wages may fuel a rebound in private consumption, leading to economic growth. But the outlook is unclear as worries over a U.S. economic downturn and falling Japanese stock prices due to the yen’s rapid appreciation may dampen consumer sentiment.

Monthly nominal wages per worker increased 4.5 % to ¥498,884 on average, up for the 30th straight month. Of the total, nonregular pay such as bonuses rose 7.6 %, and regular pay grew 2.3 % for the fastest increase in 29 years and eight months.

Meanwhile, the consumer price index excluding imputed rent, used to calculate the real wage index, advanced 3.3 %, unchanged from the previous month.

A labor ministry official expressed some worries over the real wage growth, saying that the improvement was led by the climb in nonregular pay.

But the official added that the real wage rise may continue thanks to the resumption of government subsidies for electricity and gas bills in August and a possible decline in import prices on the yen’s appreciation.

The average nominal wage for full-time workers including regular employees increased 4.9 % to ¥664,455 , and those of part-timers rose 5.7 % to ¥121,669 . Monthly work hours per person decreased 2.8 % to 140.5 hours.