You are here

Japan real wages continue to fall in May despite tight job market

ATION456.jpg
Japan's inflation-adjusted real wages slid in May from a year earlier despite a tightening job market to register a 25th straight month of decline, according to data released on Tuesday.

[TOKYO] Japan's inflation-adjusted real wages slid in May from a year earlier despite a tightening job market to register a 25th straight month of decline, according to data released on Tuesday.

The data highlights the challenge policymakers face in generating a virtuous cycle, under which rising revenues prompt companies to boost wages so that households increase spending.

Total cash earnings rose 0.6 per cent in the year to May, increasing for a second straight month, with regular pay up 0.3 per cent, labour ministry data showed.

But inflation-adjusted real wages fell 0.1 per cent in May after a revised decline by the same margin in April, the data showed, suggesting that consumer spending will remain weak.

The jobless rate was steady at an 18-year low of 3.3 per cent and job availability hit a two-decade high in May, reflecting a steady economic recovery.

Your feedback is important to us

Tell us what you think. Email us at btuserfeedback@sph.com.sg

But companies, particularly small firms, remain hesitant to raise wages for fear of permanent rises in costs, keeping the rebound in consumption moderate.

Overtime pay, a barometer of strength in corporate activity, also fell 1.6 per cent to mark the third straight month of declines.

REUTERS

BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes