Japan July real wages continue to slide as rising consumer prices weigh
Office workers wearing protective face masks head home during the spread of the coronavirus disease (COVID-19), at a station in Tokyo, Japan June 24, 2020. REUTERS/Issei Kato
TOKYO: Japan's real wages extended their slide to a fourth straight month in July, government data showed on Tuesday (Sep 6), 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 per cent 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 per cent from a year earlier, its sharpest rise since a 3.4 per cent gain in October 2014.
That outpaced nominal total cash earnings, which rose 1.8 per cent in July, down from the previous month's downwardly revised 2.0 per cent gain, the data showed.
Overtime pay, a key indicator of strength in corporate activity, advanced 4.7 per cent 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 per cent in July, below the prior month's 3.0 per cent increase.
