Japan's real wages fall 1.4% in September, down for 9th straight month
Ideas
Company pay hikes, while good, are only good if they get ahead of the persistent inflation that has continued in Japan since the pandemic.
The challenge and problem is only about 30 percent of workers in Japan work for the large name-brand companies and the other 70 percent work for small and mid-size companies that usually pay less in wage increases than the large companies, which means up to 70 percent of the Japanese workforce has less disposable income to use in the economy,
Nominal wages also includes inflation which is not a good measure and real income should be the true income measure of an economy. Real income shows the purchasing power of a consumer and how much their money they can use in an economy.
Of course nominal wages increased for the 45th consecutive month as inflation has continued to remain high for a very long time.
Yes, consumer prices were up 3.4 percent in September. That might not seem like much for some upper middle-income families, for the average middle-income family and low-income family that might be a huge increase in prices as again, their disposable income is less when prices go up and or overall inflation in the economy increases.
A minimum wage in any country or many countries is always a heated topic as there are both positives and negatives for increasing the minimum wage.
Some might say that those who have to work certain jobs should be afforded a living-wage as they might have families and children to support.
Some might say, those who work minimum wage jobs are the less educated and shouldn't be rewarded for anything more than a low wage.
And some might have to work minimum wage jobs as they can't find anything else and it not their fault as they just need job to survive and again maybe to take care of their families.
And then there are the companies who can only hire workers on a minimum wage as their profits margins can't handle anything beyond that amount.
Some of these companies might actually have a heart or conscious but still can't do anything but give workers a minimum wage as that is all they can afford to do.
The 1,121 yen minimum wage is one of the lowest among advanced economies as 1,121 only comes out to $7.32 in US dollars which is very low, as no US worker is going to work for that low amount as it might not even pay for the gas in a person's car.
Some might say Japan and the US very different but still Japanese workers who have to work and get the minimum wage deserve a real living wage to live on and or take care of their families.
But then again, many or some of the small and mid-size companies in Japan and probably most service type companies, can only afford to pay a minimum wage as again their profit margins or so thin they can't afford to even pay the 66 yen increase in the minimum wage.
No disrespect to the new Prime Minister, but every new Prime Minister always says the same thing about improving wage growth or curbing inflation or reducing the prices in the economy, but nothing really gets done or improves, and that's not to blame the Prime Minister in Japan as an economy is very complicated and no Prime Minister or even president of any country alone can't fix and economy
The BOJ is always saying they are closely watching what is happening but nothing really changes and the BOJ is tasked at this time with the challenges of the US tariff situation and then there is the continued inflation situation in Japan and the BOJ has to decide which is the most important priority among the two.
A country's central bank, more than a Prime Minister or a president, has more control over an economy and they have the tools and and strategies needed to try and improve an economy to either slow it down or spend it up by using the key interest rate to try and improve an economy.
Have a nice day!
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