Photo/Illutration The building housing the Ministry of Health, Labor and Welfare in Tokyo’s Chiyoda Ward (Asahi Shimbun file photo)

Real wages in Japan fell 0.9 percent in 2022, the first such decline in two years, as inflation drowned out pay increases, according to preliminary labor ministry data released Feb. 7.

Figures show that average pay packets in 2022 were fatter for the second straight year, 2.1 percent over 2021, marking the largest growth since 1991.

However, nominal wages were outmatched by rising living costs, with the consumer price index rising 3 percent, its highest increase since 2014 when the consumption tax rate was hiked from 5 percent to 8 percent.

In the meantime, real wages rose 0.1 percent last December compared with the same month a year earlier, the first increase in nine months, due to a 4.8 percent rise in nominal wages, which was slightly higher than the inflation rate.

However, the jump in average pay was led by bonuses typically paid in December in many Japanese companies, with the “special payment” category in the statistics showing a 7.6 percent increase.

On the other hand, the “regular payment” category, which means monthly salary, showed only a 1.9 percent increase, much smaller than the price hikes.

“It’s unlikely that real wages will keep on rising (amid the continuing price hikes),” said a ministry official, noting that far fewer businesses pay bonuses in January.

Related News