Japan Real Wages: Updated May 22, 2025.

Japan's real wages fall 0.5% in FY 2024, down for 3rd straight year.

Article source: https://mainichi.jp/english/articles/20250522/p2g/00m/0bu/002000c

Ideas

To be honest, Japan is not acting like an advanced economy as it seems to lack behind many up and coming economies these days.

Japan's per capita income lags behind many advanced economies and the way that pay growth is lagging behind prices is a telling concern for the Japanese economy.

There was a time in the late 1980's where some thought Japan was going to surpass the US economy but those days seem long gone.

Nominal wages are not important as they don't tell the real story related to households and their spending power which is way behind related to price increases in Japan.

This situation has been a long time in the making but its seems the Japanese government or Japanese businesses were not interested in trying to fix or help the situation, as they were only interested in their small piece of the pie in Japan.

Some have called this the 3 decade loss of Japan which before it was called the lost decade when economic growth was less than normal or less than expected.

Nominal wages include inflation so they really are not that important as what really matters is real wages and purchasing power for an economy.

Real Wages indicate how much a Japanese household can really spend in the economy while nominal wages again include inflation which might be considered inflated wages with no real purchasing power.

Real wages need to be considered against inflation to see how much purchasing power Japanese households really have and how much disposable income they have left after paying their bills.

Unfortunately many Japanese companies were reluctant to increase wages for their workers as they were more focused on taking care of their shareholders instead of their stakeholders working in the company.

At the same time, inflation have been creeping up steadily causing many companies to have very weak profit margins and when inflation really hit they were not prepared how to handle the continued increase in raw material costs, energy costs, and especially the need to increase wages.

Yes, the problem is many companies were late in increasing wages and the 5 percent wage increases given in 2024 were too little too late as they should have been giving wages increases many years before.

At the same time it must be remembered that up to 70 percent of the Japanese workforce doesn't work for the large name-brand companies but small and midsize companies which don't have the resources that large companies have and can't pay the same wage increases.

All previous Japanese Prime Ministers have tried different strategies to improve the Japanese economy and most have failed to do what they wanted to do or the results were only short-term fixes but then the same situation returned or was worse.

Focusing on small and mid-size companies is good but can they all be helped as its going to take a lot of resources to help that many of companies and or that many Japanese households that work for small and mid-size companies in Japan.

Again this is a situation that has been known for a long time as wages in Japan have steadily been declining compared to wages in other advanced economies but know one seemed to notice or pay attention to it until long-term inflation kicked in and many Japanese households and business were significantly challenged.

This situation, has been known for a very long time as many have known that Japan was/is falling behind many other advanced economies and some have even suggested Japan should be like Switzerland and not worry too much about its place in the global economy.

But unfortunately, these days, no country is a island unto itself, and no pun intended related to Japan as an island nation, all countries and economies these days are too interconnected for Japan to isolate itself from the rest of the world.

Have a nice day!

Japan And Foreign Rice Prices: Updated March 5, 2025.

Japan's private rice imports hit record high amid inflation

Article Source: https://mainichi.jp/english/articles/20250216/p2g/00m/0bu/028000c

Ideas:

The Japanese rice market is one of the most protected markets in the world next to maybe the South Korean rice market, as both countries have high tariffs on foreign rice going into each country.

Some have suggested the tariffs on foreign rice in Japan has been as high as 778%, which almost makes foreign rice unbuyable in Japan.

The rice market back in the summer of 2024 and maybe even 2023 had some not so good growing seasons which limited supplies and whenever there is a supply shortage prices will go up to protect the growers with the same profits margins and when there is no shortage.

At the same time, the Japanese government has as reserve of unused rice and should have flooded the market with the unused rice to stabilize prices as rice is major staple in Japan and is needed by only by restaurants, but supermarkets and Japanese families, with small children need the rice everyday.

At the same time the Japanese government should have implemented price controls into the market as a way to protect Japanese society from huge increases and price gougers.

Back in 2023 and 2024, the rice growing seasons in Japan were not as good as expected which resulted in a rice shortage in Japan. At that time, the Japanese government, which holds onto a large reserve of rice, just for situations like this, should have released their reserves much sooner to keep prices from getting out of control.

And or the Japanese government should have allowed for the increase of foreign rice into Japan without the high tariffs and it was would be considered an emergency situation, as rice is a table in Japan and is used daily and weekly but most if not all Japanese households.

Also, price controls too, should have been used to control the price of rice as it seems there was market failure and normal market principles were not in control in the rice market in 2023 and 2024.

A tariff is nothing more that a sales tax on products and usually the final customer or consumer always pays for the tariff as supermarkets and restaurants will pass-on the tariff the the retail customer.

If the government knew the tariff was  a sales tax and would be passed-on to the final customer, why have the tariff in the first place instead of reducing tariffs temporarily to the good of society instead of just protecting the rice farmers in Japan.

At the same time domestic output was supposedly less than normal which resulted in shortages for restaurants and supermarkets in Japan.

Sometimes government don't use common sense and just stick to ideas that protect their sovereignty and nor really think about the good of society that they are supposed to be serving in the first place.

If all of this rice was imported in Japan, why then did the price of rice remain so high through most of 2024. As most likely it was because of the high tariffs on foreign rice that should have been temporarily suspended for the good of society in Japan, or at least until the supply levels were back to some kind of normalcy.

At the same time, its been suggested that the taste and feel of Japanese rice is very different from rice in other countries which might play a part in the price of rice in Japan, but if so, Japanese households/consumers might not like foreign rice, so why continue to have high tariffs and prices on foreign rice in Japan.

Perhaps the Japanese government needs to increase the customs-free imports of rice as a way to protect Japanese consumers from high rice prices, and increase the supply and at the same time invoke emergence price controls to keep prices gougers from increasing the price too much and again to protect Japanese society.

It has been suggested the Japanese government didn't use the reserves of rice it had in an efficient way and or didn't release the reserve rice fast enough as prices significantly increase last August along with shortages in supermarkets and maybe restaurants too.

But all of this might be considered water under the bridge as most of this happened in 2024, but unfortunately its still happening in Japan today.

Prices increases of 27.7 percent and again 64.5 percent can only be considered market failure in the rice market in Japan, as whomever, wasn't in control of the rice supply, rice reserves and also reducing tariffs on foreign rice for the good of Japanese society.

If there was a short supply of domestic rice in Japan, wouldn't it have been beneficial to reduce the tariffs on foreign rice, as least temporarily, as a way to protect Japanese society and not just placating the ever decreasing number of Japanese rice farmers in Japan, who seem to have too much power at the detriment of Japanese society.

There should never have been a rice shortage in Japan or any kind of market failure in the rice market in Japan, as whomever, decided to just let the market handle the situation instead of the government stepping, in times of market failure, and protecting Japanese households and Japanese society.

There should always be a stable supply of rice in Japan as its a major staple that is eaten daily and a rice shortage should never have happened in Japan.

Have a nice day!

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