Japan Real Wages Fall In March 2023 For 12th Month In A Row

Japan's real wages fell 2.9 percent in March from a year earlier, declining for the 12th straight month, affected by rising inflation that led to households tightening their purse strings, government data showed, Kyodo News reported.

Photo Insert: Nominal wages, or the average total cash earnings per worker including base and overtime pay, rose 0.8 percent to 291,081 yen ($2,100), up for the 15th consecutive month, but with the pace of rise limited to less than 1% for the third month in a row.

The drop in inflation-adjusted wages comes as higher food, energy and other prices impacted by Russia's war in Ukraine have outpaced pay hikes. The government of Prime Minister Fumio Kishida has called on businesses to raise wages in line with inflation and help sustain the economy.

Nominal wages, or the average total cash earnings per worker including base and overtime pay, rose 0.8 percent to 291,081 yen ($2,100), up for the 15th consecutive month, but with the pace of rise limited to less than 1% for the third month in a row, the Ministry of Health, Labor and Welfare said.

"We will see how wage hikes (recently agreed) in annual negotiations (between management and labor unions) will be reflected in data after April," a ministry official said.

Some major Japanese companies offered their biggest pay raises in decades during the negotiations. Separate data showed that the nation's household spending fell a real 1.9% in March from a year before, following a 1.6% rise in February.

Households with two or more people spent an average of 312,758 yen, the Ministry of Internal Affairs and Communications said, Mainichi Japan also reported.

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