TOKYO (Reuters) – Japan’s real wages extended their slide to a fourth straight month in July, government data showed on Tuesday, as the biggest jump in consumer prices in more than seven years outpaced a much more modest gain in nominal wages.
A lack of sustainable wage growth is increasingly becoming a thorny issue for policymakers hoping that stronger consumer sentiment will boost demand and prop up growth in the world’s third-largest economy.
Inflation-adjusted real wages, a barometer of households’ purchasing power, slumped 1.3% in July from a year earlier, labour ministry data showed, weighed by rising prices.
The consumer price index the ministry uses to calculate real wages, which includes fresh food prices but excludes owners’ equivalent rent, jumped 3.1% from a year earlier, its sharpest rise since a 3.4% gain in October 2014.
That outpaced nominal total cash earnings, which rose 1.8% in July, down from the previous month’s downwardly revised 2.0% gain, the data showed.
Overtime pay, a key indicator of strength in corporate activity, advanced 4.7% in July from the same period a year earlier, its smallest gain in four months.
Special payments, which include the discretionary seasonal bonuses that firms tend to slash when they face headwinds, rose 2.8% in July, below the prior month’s 3.0% increase.
The following table shows preliminary data for monthly incomes and numbers of workers in July:
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Payments (amount) (yr/yr % change)
Total cash earnings 377,809 yen ($2,689.41) +1.8
-Monthly wage 268,774 yen +1.5
-Regular pay 249,813 yen +1.2
-Overtime pay 18,961 yen +4.7
-Special payments 109,035 yen +2.8
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Number of workers (million) (yr/yr % change)
Overall 51.628 +1.1
-General employees 35.473 +1.0
-Part-time employees 16.155 +1.3
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The ministry defines “workers” as 1) those who were employed for more than one month at a company that employed more than five people, or 2) those who were employed on a daily basis or had less than a one-month contract but had worked more than 18 days during the two months before the survey was conducted, at a company that employs more than five people.
To view the full tables, see the labour ministry’s website at: http://www.mhlw.go.jp/english/database/db-l/index.html
($1 = 140.4800 yen)
(Reporting by Daniel Leussink; Editing by Hugh Lawson)
