Tetsushi Kajimoto
TOKYO (Reuters) – Average base wages for Japanese workers rose to a 31-year high in May, data showed on Monday, suggesting that big pay increases offered by companies in annual wage negotiations are gradually being passed on to households.
But a weak yen and rising commodity prices have raised import costs and caused inflation-adjusted real wages to fall for a record 26th consecutive month, complicating the Bank of Japan’s efforts to normalize monetary policy.
Basic wages, or regular wages, rose an average of 2.5 percent in May from a year earlier, the fastest growth since January 1993, when Japan’s asset bubble burst.
This increase is larger than the revised 1.6% increase in April and reflects the significant increase in monthly wages agreed to by labor and management in annual labor negotiations.
Yoshimasa Maruyama, chief market economist at SMBC Nikko Securities, said, “This data highlights the momentum of wage growth in Japan. Real wages continue to fall but are likely to start to rise from July.”
Nominal wages, or the average total cash earnings per worker, rose 1.9% to 297,151 yen ($1,850), accelerating from a 1.6% increase in the previous month and marking the biggest year-on-year increase in 11 months.
But adjusted for inflation, wages fell 1.4% in May, following a revised 1.2% decline in April.
There were signs that Japan’s worsening labor shortage is translating into wage increases across a wide range of sectors: Wage increases at companies with 30 or more employees outpaced inflation for the first time in 26 months, but when very small companies with five or more employees are included, wage growth remained below inflation.
Hourly wages for part-time workers rose 4.0% in May from the same month a year earlier, outpacing the 2.7% increase for full-time workers.
(1 dollar = 160.6700 yen)
