The Ministry of Health, Labor and Welfare in Chiyoda Ward, Tokyo
17:16 JST, August 6, 2024
TOKYO (Jiji Press) — Japan’s real wages, adjusted for inflation, rose in June for the first time in 27 months, the Labor Ministry said Tuesday.
The real wage index rose 1.1% from a year earlier, reflecting higher base wages after large pay increases agreed during this year’s “shunto” spring wage negotiations. Another positive factor was higher bonuses on the back of rosy corporate profits.
The turnaround in real wages could fuel a rebound in private consumption, leading to economic growth. But the outlook is unclear, as concerns about a U.S. economic downturn and falling Japanese stock prices due to the rapid appreciation of the yen could dampen consumer confidence.
Monthly nominal wages per employee rose 4.5% to an average of ¥498,884 for the 30th consecutive month. Of the total, non-regular wages such as bonuses rose 7.6% and regular wages grew 2.3%, the fastest increase in 29 years and eight months.
Meanwhile, the consumer price index excluding imputed rent, which is used to calculate the real wage index, rose by 3.3%, unchanged from the previous month.
A Labor Department official expressed concern about real wage growth, saying the improvement was driven by the rise in incidental wages.
However, the official added that real wage growth may continue thanks to the resumption of government subsidies for electricity and gas in August and a possible drop in import prices due to the yen’s appreciation.
The average nominal wage for full-time workers, including permanent employees, rose 4.9% to ¥664,455, and that of part-timers rose 5.7% to ¥121,669. The number of monthly working hours per person fell 2.8% to 140.5 hours.
