Japan's real wages fall 1.3% in 2025, down for 4th straight year
TOKYO (Kyodo) -- Japan's real wages in 2025 fell 1.3 percent from a year earlier, marking the fourth consecutive year of decline, as pay hikes failed to keep pace with rising prices, government data showed Monday.
Nominal wages, or the average monthly cash earnings per worker including base and overtime pay, increased 2.3 percent last year to 355,919 yen ($2,260), up for the fifth straight year, according to the Ministry of Health, Labor and Welfare.
But consumer prices rose 3.7 percent in the reporting year, picking up pace from a 3.2 percent increase in the previous year, weighing on inflation-adjusted wages, a barometer of consumer purchasing power.
Major Japanese companies agreed to raise wages by an average of 5.39 percent at the 2025 "shunto" labor-management negotiations ahead of the start of the business year for many corporations, according to the Japan Business Federation.
The focus at this spring's negotiations will be on whether wage increases top 5 percent for the third year at large companies and whether higher pay will be seen at small and medium-sized companies. The Japanese Trade Union Confederation has called for a real wage rise of 1 percent.
Real wages affect private consumption, which accounts for more than half of Japan's gross domestic product.
After raising its benchmark interest rate in December to the highest level since 1995, the Bank of Japan will be closely monitoring the outcome of the wage negotiations as higher pay and prices are key factors in its policy decisions.
In December, real wages at workplaces with five or more employees decreased 0.1 percent from the previous year, falling for the 12th straight month.
Nominal wages increased 2.4 percent to 631,986 yen, up for the 48th straight month, the ministry said.
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