Foresight

Real wages fall for 23rd consecutive month in Japan

Wage increases have failed to keep pace with inflation: this is the longest decline on record.

According to government data released on Monday, real wages in Japan fell for the 23rd consecutive month.

With Prime Minister Fumio Kishida calling on business leaders to raise wages at a rate below inflation, the country equaled its longest period of real wage decline since 1991, with a 1.3% drop in February.

The last such decline occurred between 2007 and 2009, during the global financial crisis.

However, real wages have lagged behind price rises, essential to overcoming the deflationary stagnation that has prevailed since the 90s. Households’ purchasing power is declining, while the price of everyday consumer goods continues to rise due to rising raw material costs and the weak yen.

The impact of higher starting salaries at major Japanese companies will be reflected in the future.