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Real wages in Japan fell by the most in nearly two years in May due to inflation

Image: Reuters Berita 24 English -According to official data released on Tuesday, Japan's real earnings continued to shrink in May and r...

Image: Reuters

Berita 24 English -According to official data released on Tuesday, Japan's real earnings continued to shrink in May and recorded the largest year-over-year decline in almost two years as consumer inflation remained close to a seven-year high and exceeded nominal pay growth, decreasing families' purchasing power.

Japan's consumption-driven economic recovery from the coronavirus pandemic is likely to be hampered by rising living expenses coupled with poor wage growth.

Although an opinion poll released on Monday indicated that Prime Minister Fumio Kishida's ruling party is expected to gain seats in the upper house election on Sunday, inflation is also a top concern for voters.

A crucial indicator of consumers' purchasing power, inflation-adjusted real wages declined 1.8 percent from a year earlier in May, according to the labour ministry.

The greatest loss since July 2020 came after an April decline of 1.7 percent that was downwardly corrected.

The consumer price index that the ministry uses to determine real wages increased by 2.9 percent in May, following an increase of 3.0 percent in April that represented the biggest increase since October 2014. This index includes fresh food products but excludes owners' equivalent rent.

The figures revealed that price inflation exceeded nominal total cash earnings, which increased by 1.0 percent in May after an upwardly revised 1.3 percent increase in April.

A measure of the health of corporate activity, overtime pay increased 5.5 percent year-over-year in May, the most in nine months and higher than the downwardly revised 5.0 percent gain in April.

Special payments, which include seasonal incentives that businesses frequently reduce when facing challenges, decreased by 7.0 percent in May, though the figure is notoriously unstable outside of the June to August and November to January bonus seasons.

According to a health ministry official, the decline in special payments, which was the largest decline in 16 months, was the primary cause of the decrease in overall cash revenues starting in April.

The following table displays preliminary information for May's monthly incomes and labour force:


Payments (amount) (% change from one year to the next)

277,016 yen ($2,048.03) in total cash flow +1.0

-Monthly pay 266,314 yen +1.5

Regular pay: 247,975 yen plus 1.

-Overtime compensation of 18,339 yen plus 5.5

Special payments: 10,702 yen; negative seven.


Number of employees (million) (change in percentage from year to year)

Overall, 51.261 +0.7

-General employees 35.432 +0.5

15.829 part-time workers were employed, up by 0.


The ministry defines "workers" as 1) individuals who have worked for a company with more than five employees for more than one month, or 2) individuals who have worked daily or under a contract of less than one month but for more than 18 days in the two months prior to the survey's administration.

Visit the website of the labour ministry at: to view the complete tables.

($1 = 135.2600 yen)

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