The Japanese government recorded the first decline in real wages in two years at the end of 2022, on February 7, Kyodo News reports.
According to the authorities, household spending continued to grow moderately in a context of inflation, so that, adjusted for price increases, the drop in real wages was 0.9%. It is observed that the change in the cost of food, energy and other imported goods had the greatest effect.
The current prime minister, Fumio Kishida, has repeatedly urged employers to raise the wages of their employees, but prices have risen faster than people’s incomes.
According to data released by the government, the average total cash income of employees, including overtime, rose 2.1% to 326,000 yen (176,000 rubles). This growth was the fastest in 31 years.
However, growth was largely seen in December, due to bonuses, bonuses and other payments that cushioned the impact of inflation. In this sense, the government believes that this growth is temporary and that real wages will continue to fall.
At the same time, average growth in household spending increased by 1.2%. According to the Ministry of the Interior and Communications, families of two or more people spend an average of 291,000 yen (157,000 rubles) per month.
The largest growth was seen in the volume of entertainment, which included travel: 8.2%. This is due to the relaxation of restrictions previously introduced to combat the spread of coronavirus infection.
However, compared to 2019, the level of spending is still reduced by 3.5%. At the end of 2021, this drop was 4.6%. However, the decrease in spending by residents in December was 1.3% lower than in 2021.
Remember that more than half of Japan’s gross domestic product consists of private consumption, the key indicator of which is data on real wages.
For a decade, the government has been trying to accelerate inflation to the 2% target. To do this, it applied an ultra-soft monetary policy, which implies an increase in the money supply.
In the second half of 2022, Japan faced rising prices, leading to a 4% rise in the Consumer Goods Value Index, more than double the target.
Source: Rossa Primavera
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