Japanese Workers' Real Wages Fall for Sixth Consecutive Month, Down 1.3% Year-on-Year

The real wages of Japanese workers have decreased by 1.3% compared to last year, marking a negative trend for the sixth consecutive month.

According to the "June Labor Statistics Survey (preliminary figures)" released by Japan's Ministry of Health, Labour and Welfare on August 6, the average nominal wage per worker at companies with five or more employees was 511,210 yen (approximately 4.82 million won) per month, an increase of 2.5% compared to the same month last year.

AFP Yonhap News

Nominal wages have continued to rise for 42 consecutive months.

However, real wages, which take into account price fluctuations (excluding imputed rent for owner-occupied housing), decreased by 1.3% compared to the same month last year, marking a decline for the sixth consecutive month. The consumer price index for June, which is used to calculate real wages, rose by 3.8%.

Nihon Keizai Shimbun (Nikkei) analyzed that real wages increased in June of last year due to a rise in bonuses, and that this year's decline in real wages for June can be attributed to a reverse base effect.

Meanwhile, on the same day, the Japan Business Federation (Keidanren) announced the final results of the spring labor-management negotiations. According to a survey of 139 major companies, the average wage increase rate in this year's spring wage negotiations, known as Shunto, was finalized at 5.39%. Nikkei reported that this is the first time since 1990-1991 that the wage increase rate has exceeded 5% for two consecutive years. In last year's Keidanren survey, the Shunto wage increase rate was recorded at 5.58%, the highest in 33 years since 1991 (5.60%).