Japan's Real Wages Fall for Two Consecutive Months Due to Inflation Impact... 1.8% Drop in May

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Japan's real wages have decreased for two consecutive months due to the impact of high inflation.

According to the Nihon Keizai Shimbun on the 5th, the Ministry of Health, Labour and Welfare announced preliminary labor statistics showing that real wages in May, adjusted for price changes, fell 1.8% compared to the same month last year, marking two consecutive months of negative growth. Nihon Keizai analyzed that "wage growth is not keeping up with rising prices of food and energy."

Bloomberg reported that the decrease in real wages means "households' living expenses are rising faster than salary increases, weakening purchasing power," and noted that ahead of the House of Councillors election on the 10th, the issue of living costs due to inflation has become a key topic in Japan.

The nominal cash earnings per person in May increased by 1.0% year-on-year to 277,016 yen (approximately 2.64 million won), marking five consecutive months of positive growth. Overtime and other extra wages rose by 5.5%, showing growth for 14 consecutive months. Looking at total cash earnings by employment type, regular workers increased by 1.2%, and part-time workers by 1.9%. By industry, accommodation and food service increased by 10.5%.

Total real working hours increased by 0.8% to 131.1 hours. Nihon Keizai noted that this was likely influenced by one more working day compared to last year.