TOKYO (Reuters) – Japan’s real wages fell in November for a third month as inflation outstripped stagnant nominal wages, a government data showed.
The data came days after Japanese Prime Minister Fumio Kishida called on business lobbies and unions to work together to raise workers’ wages, to achieve a cycle of economic growth and wealth distribution he had pledged to win the October general election.
Inflation-adjusted real wages, a key measure of households’ purchasing power, slipped 1.6% in November from a year earlier, the labour ministry said on Friday.
The drop was faster than a 0.7% fall in October and marked the biggest decline since December 2020.
Japan’s consumer inflation has been accelerating on rising energy and food prices. The core consumer price index (CPI), a measure closely watched by the Bank of Japan, rose in November at the fastest pace in nearly two years.
The CPI figure the labour ministry uses to calculate real wages – which sets a different base year, includes fresh food prices but excludes owners’ equivalent rent – gained 1.7% in November, the data showed.
Meanwhile, nominal total cash earnings stalled in November, with a 0.0% change from a year earlier, which snapped an eight-month growth streak and followed a 0.2% gain in October, according to the data.
The slowdown in nominal wages was due to the increasing share of part-time workers who receive lower pay, a health ministry official said. Part-timers accounted for 31.87% of all workers in November, the highest rate since February 2019, he said.
Regular pay or base salary – the majority component of total cash earnings that determines a wage trend – was up 0.3% in November, after a 0.2% drop in October.
Overtime pay, a barometer of corporate activity’s strength, rose 2.7% year-on-year in November, rising for the eighth straight month, following an upwardly revised 2.3% advance in the previous month.
Special payments, which mainly consist of volatile one-off bonuses, fell 7.9% in November from a year earlier, the data showed.
The following table shows preliminary data for monthly incomes and numbers of workers in November:
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Payments (amount) (yr/yr % change)
Total cash earnings 280,398 yen($2,422.44) 0.0
-Monthly wage 264,632 yen +0.5
-Regular pay 246,063 yen +0.3
-Overtime pay 18,569 yen +2.7
-Special payments 15,766 yen -7.9
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Number of workers (million) (yr/yr % change)
Overall 52.219 mln +1.2
-General employees 35.579 mln +0.6
-Part-time employees 16.641 mln +2.3
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The ministry defines “workers” as 1) those who were employed for more than one month at a company that employed more than five people, or 2) those who were employed on a daily basis or had less than a one-month contract but had worked more than 18 days during the two months before the survey was conducted, at a company that employs more than five people.
($1 = 115.7500 yen)
(Reporting by Kantaro Komiya; Editing by Kim Coghill)