Japan March real wages fall for first time in three months
TOKYO : Japan's real wages shrank in March as inflation rising at its fastest pace in more than three years outstripped steady nominal wage growth, the government said on Monday.
The report adds to concern that mounting cost pressure on households' real income will thwart Japan's post-pandemic recovery scenarios, even as the government lifted all coronavirus curbs by late March in an effort to foster a strong rebound in consumption.
Inflation-adjusted real wages, a key gauge of households' purchasing power, dropped 0.2per cent in March from a year earlier, marking the first decline since December, labour ministry data showed.
Prices are rising fast in Japan, propelled by the global commodity rally in the wake of the Ukraine crisis and the yen's recent fall to two-decade-lows. Last month, consumer inflation in the Tokyo area rose at the fastest pace in seven years.
The nationwide consumer price index that the ministry uses to calculate real wages, which includes fresh food prices but excludes owners' equivalent rent, rose 1.5per cent in March, the fastest gain since October 2018.
That outpaced nominal total cash earnings, which increased 1.2per cent in March at the same rate in the previous month, the data showed.
Real wages are expected to post larger falls in coming months if the current price inflation keeps up its speed, because, on the other hand, "it's unlikely for (nominal) wages to spike in a very short period of time", a labour ministry official said.
Overtime pay, a barometer of business activity strength, rose 2.5per cent in March from a year earlier. The gain, while marking the 12th month of increases, shrank from a downwardly revised 4.9per cent rise in February.
Meanwhile, special payments rose 10.7per cent in March, which was the biggest advance in five months and much larger than a 0.6per cent rise logged in March 2021.
"Some firms posted robust earnings at the end of their financial year in March, and their bonuses to employees may have contributed to the positive reading," said the official.
The following table shows preliminary data for monthly incomes and numbers of workers in March:
Payments (amount) (yr/yr per cent change)
Total cash earnings 286,567 yen (US$2,196.93) +1.2
-Monthly wage 266,050 yen +0.6
-Regular pay 247,249 yen +0.5
-Overtime pay 18,801 yen +2.5
-Special payments 20,517 yen +10.7
Number of workers (million) (yr/yr per cent change)
Overall 50.490 +0.4
-General employees 34.691 +0.2
-Part-time employees 15.799 +0.7
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.
(US$1 = 130.4400 yen)
(Reporting by Kantaro Komiya; Editing by Emelia Sithole-Matarise)