Real wages declined in Japan

reports Mehr News Agency Payroll negotiations have taken place in large corporations annually.

Despite the increase in the highest level of basic salaries in more than 5 years and the growth of overtime payments that led to increased nominal wages, the inflation rate, which has reached its highest level in the last two years, has reduced real wages. This index is considered a key criterion for economic growth -based consumption growth.

The Central Bank of Japan is widely expected to keep interest rates unchanged in reviewing its monetary policy on March 1-8, as officials have repeatedly emphasized the need to evaluate wage growth after rising interest rates in January.
The Ministry of Labor data shows that real wages, which determine the purchasing power of consumers, decreased by 4.9 percent in January compared to last year. The drop came after an increase of 4.9 percent in December (modified) and a growth of 4.9 percent in November.

Consumer inflation rate used by the Ministry of Labor to calculate real wages and includes fresh food but not rental costs has increased to 4.9 % compared to last year, the highest level since January.

Basic and overtime growth

Data indicate that basic salaries or regular wages increased by 4.9 percent in January, which is the biggest growth since December 6.5 % in January.
Overtime payments, which is a criterion for evaluating corporate economic activity, also increased by 4.9 percent, which is a significant improvement in December.
In contrast, special payments, which mainly include uniform and swing rewards, have decreased by 4.9 percent. The total cash or nominal wage revenue rose by an average of 4.9 percent to $ 1.5 to $ 5, but the growth was reduced by a 4.9 percent increase in December, mainly due to a drop in special payments.

Spring negotiations and its impact on economics

Japan’s largest workers’ union last week announced that its member unions have demanded an average increase in salaries last week, which is the most bold demand for salaries in more than five years.
In Japan, the annual negotiations between executives and trade unions usually end in large companies by mid-March, and the criterion for non-union workers’ legal negotiations and smaller companies is placed.

According to a Japanese Ministry of Labor, the effect of these annual negotiations usually appears in wage statistics from April or months later.