Photo/Illutration The building that houses the labor ministry (Asahi Shimbun file photo)

The nation’s real wages declined by 1.8 percent in January compared to the same month last year, marking the first decrease in three months.

This marks the sharpest drop since March last year despite a 3.1 percent increase in nominal base salaries, which is the highest growth in more than 32 years.

The increase in wages could not keep pace with the sharp rise in prices, especially in food items, leading to a significant drop in inflation-adjusted incomes.

According to preliminary data released by the labor ministry on March 10, the average nominal wage in January increased by 2.8 percent to 295,505 yen ($2,000), marking the 37th consecutive month of growth.

However, the consumer price index also rose by 4.7 percent, driven by sharp increases in food prices, including rice and fresh produce such as cabbage.

Base pay in January increased by 3.1 percent to 263,710 yen, the highest growth rate since October 1992. However, bonuses and other benefits dropped by 3.7 percent to 12,317 yen.

This stands in stark contrast to December and November, when real wages grew due to larger bonuses. In Japan, employers typically pay bonuses twice a year: once in the summer and again at the end of the year.

“Although wages are rising, the surge in prices is severe, especially for food items,” said a ministry official. “A price increase of over 3 percent makes it very difficult for real wages to show positive growth.”

During the annual wage negotiations last spring, unions achieved an impressive pay increase of over 5 percent, the highest in 33 years, according to Rengo (Japanese Trade Union Confederation), the nation’s largest labor union umbrella organization.

However, real wages have continued to show a negative trend.

This spring’s “shunto” wage negotiations are seeing an average wage increase request of 6.09 percent, up 0.24 percentage points from last year. This marks the first time since 1993 that wage demands have exceeded 6 percent.

The deadline for responses from major companies is set for March 12.

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