Japan’s real wages in April show largest monthly gain since 2010

The increase was partly due to a 0.5% drop in the consumer price index, and a y-o-y rebound in part-timers’ compensation.
By: | June 9, 2021
Topics: Compensation and Benefits | Employee Experience | Health and Wellness | Japan | News

Japan’s real wages in April registered the largest monthly rise in over a decade as overtime pay and salaries of part-timers rebounded, according to data from the labour ministry.

Inflation-adjusted real wages, a measure of a household’s purchasing power, rose 2.1% year-on-year, showing the largest monthly gain since July 2010. 

The rise in inflation-adjusted real wages was partly due to a 0.5% drop in the consumer price index as the pandemic caused prices to weaken, and a year-on-year rebound in part-timers’ compensation, reports Reuters. 

Base salary, which makes up most of total cash earnings, rose for the fourth straight month, gaining 0.9%. Meanwhile overtime pay jumped 6.4% year-on-year in April, registering its first increase since August 2019. Special payments increased 8.5% in April. 

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In this year’s annual spring wage negotiations, major companies have agreed on an average pay hike of 1.82%, which is below 2% for the first time since 2013, based on data from the Japan Business Federation. 

The final results of the wage negotiations will be out in July.