Japan's Real Wages: Updated Nov. 11, 2024.

Japan real wages in Sept. fall 0.1% on year, down 2nd month in row

Article Source: https://mainichi.jp/english/articles/20241107/p2g/00m/0bu/007000c

Ideas:

Wage increase in Japan usually only take place in April at the beginning of the new fiscal year, while inflation and prices increases happen anytime so no doubt real wages might have fallen behind prices in Japan.

Subsidies, are good and needed to help Japanese households, but they should only be temporary, at best in a market economy, but at the same time, inflation in Japan is not temporary and seems to be constant since the pandemic.

Wage increases should have been every year, and at a level that Japanese workers could feel good about the wage increases and then spent freely as needed.

Real Wages are what are important as real wages are wages without inflation and is what a consumer can use to buy things in the market place.

Again subsidies are good, but when they end Japanese consumers are back where they started as subsidies are only temporary and don't really solved the main problem of constant price increases.

The real challenge is the weak Japanese yen, which increases import prices in Japan, as Japan is a resource-poor country which put the Japanese domestic economy under a lot of stress.

But the real problem is the weak Japanese yen is good for Japanese foreign investments, Japanese exporters, and foreign tourists who go to Japan, as they have more purchasing power to buy things.

Average wages in Japan is for the average workers, most likely at a large company, while wages for 70 percent of the working population in Japan don't work for the large companies as they work for small and midsize companies who pay considerably less than the large Japanese companies.

And then there is the large group of contract workers in Japan along with the part-time workers who make even less and they are a large group of workers in Japan.

And at the same time many women, working women, especially working women with children might work for service type companies that have thin profit margins and make even less, which put as strain on Japanese families.

Prices increases of 2.9 percent don't seem like much, but you add that amount up each month it can be a large price increase for any Japanese household, especially the lower-income households in Japan.

This past summer, again was record temperatures in Japan, and of course Japanese households, especially in August during the month long holiday period people might have run their air conditioners a lot to escape the heat.

And or they might have tried to escape the heat and refrained from running their AC's too much and went the malls, if there were any, and stayed there during the day.

Most likely, Japanese companies might have used the summer bonuses on wage increases and companies just didn't have enough left to pay the usual summer bonuses.

In Japan, the salaries/wages are much lower than the US so companies makeup for it by giving workers two bonuses, one in the winter and one in the summer.

Real Wages are always adjusted for inflation and as inflation has been a constant in Japan since the pandemic real wages are been less for a very long time.

Have a nice day!