Japan real wages fall in February for 23rd month, down 1.3% on year
Ideas:
Real wages are wages without inflation, compared to nominal wages, which includes inflation, as Japanese companies have not been able or not willing to increase wages, inflation continues to be a more factor in the Japanese economy.
Only when companies are able to increase wages to the level that they are above the inflation level, households and workers will be stressed with inflation cutting into their extra income.
Perhaps, finally in April for 2024, companies can and will increases wages to the level that inflation is not so strong in the Japanese economy. But all companies, large and small need to increase wages for the full effects of wage increases for everyone in Japan.
Japanese business leaders may be willing to increase wages but they might not be able to do it depending on their profits margins and how much they can increase prices on their products to offset wage increases.
At the same time, maybe many small and midsize companies want to increase wages, but again, their profits margins are too compromised due to continual increases in raw materials and energy costs.
So Prime Minister Kishida can ask and plead all he wants but the final decision comes down to what companies can do in the final analysis.
Price increases might be decreasing but they are probably still too much for the normal family in Japan, and probably will remain too much unless a family gets a wage increase in the future.
All companies need to participate in the wage increases and if not Japan is going to have a two-tiered wage system of haves and have nots based on large companies able to give wage increases and small and midsize companies unable to do so.
The result will be an unbalanced economy and an economy that operates below its potential in the near future.
But unfortunately, that is the makeup of a market economy, which has a lot of haves and have nots but the goal of any market economy is that all can achieve some kind of quality of life which includes a good salary.
What a company agrees to and what actually happens are too different situations as there might be "small script" or fine print writing related to wage increases and workers might not actually get a 5.24 percent increase when all is said and done.
Even at 282,265 wages in Japan are much lower than many OECD countries as Japan has some of the lowest wages among advanced countries. It just shows how much Japan has changed since the 1980's or early 1990's when Japan was one of the richest OECD countries in the world.
Most likely, as some might say it, but maybe Japan grew too fast too soon after WW 2 and was only focused on economic growth or growth in foreign markets for their exports companies and didn't focus on the fundamentals needed for long-term financial or economic success.
Even at 360,00 yen that is not so much compared to other OECD countries. But at the same time, one positive related to Japan is that its executives and CEO's are not paid out of this world huge salaries that are seen in the US and Europe which is out of control for top executives. So in that sense, Japan is a more humane society that keeps its executives in line with normal salaries and not the "rock star" type salaries of the US.
What isn't mentioned is how many overtime hours do Japanese workers have to work and or are required to work, which usually is much more than in the US, and sometimes without compensation.
In Japan and elsewhere, most likely part-time workers makeup a significant percentage of workers in Japan now, including maybe contract workers or workers not on full-time full benefit contracts. This can have a huge affect on consumer spending and other economic activities in an economy overall.
The total working hours of 135.1 is not very clear as is that the total of both full-time and part-time together?
What Japan does, which maybe the US doesn't do is have bonuses twice a year which compensate workers, which makes up for the lower salaries in Japan compared to the US.
But overall, the Japanese wage system seems a more humane system compared to the US system, as there are few lay-offs or those fired in Japan compared to the US. Yes, the wages might be lower, but the employment system seems more humane compared to the hire and easily laid-off or fired system that exists in the US.
Have a nice day and be safe!
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