TOKYO – Base salaries for regular workers in Japan grew at a record pace, providing a tailwind for Prime Minister Shigeru Ishiba as he prepares to lead his party in a general election later this month.
Base pay for full-time workers rose by a record 2.9 per cent in August from a year ago, accelerating from a 2.6 per cent pace in July, the Labour Ministry reported on Oct 8. Growth in nominal cash earnings for all workers slowed to 3 per cent, a tad stronger than the consensus estimate.
In a less promising development, real wages declined after advancing for the past two months, while a separate report showed that household spending fell.
The wage data come as the newly installed leader prepares to seek a mandate in a general election to be held on Oct 27. Mr Ishiba has vowed to apply pressure on businesses to keep wages rising, building on the biggest increases in three decades secured by workers in 2024. The nation’s leading business lobby has urged the government to create an economic environment conducive to hikes.
Wage trends are among the most closely watched indicators as the government and Bank of Japan (BOJ) seek to achieve a positive cycle of rising salaries fuelling spending, spurring demand-led inflation. That mechanism would allow authorities to declare an end to deflation once and for all.
In a separate report from the Internal Affairs Ministry, Japanese households reduced their spending by 1.9 per cent in August from the previous year, an indication that households continue to tighten their budgets after more than two years of price gains at or above the BOJ’s 2 per cent target.
Households pared spending on housing, transportation and education, while outlays for food, clothing and furniture increased.
The wage figures will keep the
