Japan’s real wages fall 1.8% in January

Japanese government data showed Monday that real wages in the country fell 1.8% in January from a year earlier, the first decline in three months, due to higher food and gasoline prices.

Nominal wages, or the average total monthly cash earnings per worker including basic pay and overtime pay, rose 2.8% to 295,505 yen ($2,000) at workplaces with five or more employees, rising for the 37th straight month, Kyodo News reported, citing the Health, Labor and Welfare Ministry.

But the rise in nominal wages was still faster than the 4.7% increase in consumer prices, used in payroll data, in the reporting month, according to the labor ministry.

Slashing government subsidies to curb gas prices and rising prices of rice and fresh vegetables contributed to the inflation.

In workplaces with five or more employees, real wages, or inflation-adjusted wages, a measure of consumer purchasing power, fell for the 26th straight month through May 2024, and later in 2024, they increased year-on-year only when bonuses were paid in June, July, November and December. In workplaces with 30 or more employees, real wages fell 0.7% in January from a year earlier, their first decline in five months.