Japan's real wages fall 0.3% in Nov., down for 4th straight month
Ideas:
Wage increases in Japan usually only occurs during the beginning of the new fiscal year which is April in Japan. So wage increases might only happen one time a year, but inflation might happen every week, every month which naturally wage increases are not going to keep up with rising prices.
A decrease of 0.3 percent in real wages might not even be noticeable for many wage earners but for the low-income groups, including contract workers and part-time workers it could be a significant decrease in wages.
Nominal wages are wages including inflation so they really don't mean much as real wages are wages adjusted for inflation so they are a better indicator of an economy.
Inflation in Japan seems to keep increasing and or maintaining a high level which of course is causing a lot of stress for Japanese households and their disposable income to use after the bills are paid including food.
While subsidies for utility bills were good and of course needed for many in Japan, maybe the Japanese government decided it can't afford to subsidize everything in Japan.
Continuous increases in food prices in Japan seems to be a constant since the pandemic and or a constant since the US dollar and Japanese yen variance became so wide the the Japanese yen has remained very weak which of course hurts Japanese importers and many Japanese households.
The real wage increase in May might have happened because of the wage increases in April, but as inflation continues on, real wages haven't kept up with inflation increases.
Usually Japanese companies only increase wages in April, the beginning of the new fiscal year in Japan, so while the government might call for wage increases workers will not see them until of each new April.
The Bank of Japan has not used the traditional strategy of reducing inflation, which is/was related to increasing the key rate, suggesting the Japanese economy was/is too weak and instead seems to be using the strategy of just letting inflation run its course thinking/hoping that it will eventually begin to decrease.
An increase of real wages to 0.2 percent is not really that significant but it could be for the low-income groups, but in reality most workers probably didn't even notice or feel the 0.2 percent increase which means inflation must have decreased some.
It might have been the sharpest increase in 32 years, but in reality its been that long since Japan has seen real wages grow to the point that consumers or Japanese workers could maybe feel good about their wages.
Companies always give or usually always give summer and winter bonuses which can help the Japanese economy and especially maybe it helps for Golden Week in May and for the end of the year week long vacation, as maybe consumers use it on their trips.
The real problem might be as suggested before, up to 70 percent of the Japanese workforce don't work for large name-brand Japanese companies but small and midsize companies which might not give the same amount for bonuses that large Japanese companies do.
Japanese prices seems to keep going up and or not really deceasing as they are still quite high for Japan and Japanese households.
Among OECD economies Japan has some of the lowest wages while at one time had some of the highest. Japan basically has not kept up with what is happening with wages globally as even up and coming South Korea has surpassed Japan's wages.
Some might say the cost of living in Japan seems low but for many in Japan its is stress and struggle and their wages can't kept up globally and inflation continues to go up or remain very high.
Have a nice day!
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