【Aging, safety net and fiscal crisis in Japan】No.52: Real Wages Decline

In this column series, Yukihiro Matsuyama, Research Director at CIGS introduces the latest information about aging, safety net and fiscal crisis in Japan with data of international comparison.

Despite the fact that companies continue to experience record high profits, people are not feeling the strong economy. On February 7, 2018, the Ministry of Health, Labor and Welfare released data that shows that nominal wages grew by 0.4% in 2017. Consumer prices increased by 0.6%; as a result, real wages actually declined by 0.2%.

However, as shown in Table 1, nominal wages in the healthcare/welfare industry increased by 1.4%, which after accounting for inflation, resulted in a 0.8% increase in real terms. Although details are not shown in Table 1, nominal wages are not increasing in non-manufacturing industries other than the healthcare/welfare and the wholesale / retail industries.

Figure 1 Growth rates of nominal wages, real wages, and the consumer price index


(Source)Ministry of Health, Labor and Welfare

Table 1 Growth rate of nominal wages (by industry)


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