According to the Monthly Labor Survey released by Japan's Ministry of Health, Labor and Welfare, real wages in March 2024 were 2.5% lower than in the same month last year.
Real wages have been negative for 24 consecutive months since April 2022, breaking the longest record (September 2007 to July 2009).
Real wages exclude price increases from nominal wages and represent the actual purchasing power of the nation.
Real wages are expected to continue to fall in April and beyond
In March, the dollar-yen exchange rate (monthly average) was 149.46 yen. Since then, the yen has been weakening, as it temporarily broke through the 160-yen level on April 29.
In addition, prices of 6,433 items overall and 2,800 food items will be raised from April 2024, and revisions to health insurance premiums and electric bills are also scheduled to be raised in the future.
Although an average wage increase of 5.25% is expected in this year's Spring Struggle, real wages are expected to remain negative from April onward due to increases in various prices caused by the weakening of the yen.
Impact on the Japanese Economy
As explained in "Japan's Winning Manufacturing Industry," growth in domestic demand is essential for Japan's economy to get out of the "lost 30 years" of deflationary economy.
Nevertheless, the Kishida administration is considering only policies that will squeeze people's lives by increasing taxes and raising social insurance premiums and utility bills.
On the contrary, now is the time when inflation is rising, and the Japanese economy can return to a booming cycle by adopting the right policies.
Many Japanese citizens are beginning to realize the importance of this issue.
For more information on the conditions necessary for Japan's economy to revive, please see the "Japanese Manufacturing Industry" series (1st edition already distributed).
Click here for the Japan Ministry of Health, Labor and Welfare announcement
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