Japan actual wages eke out first rise in a yr as COVID-19 hits costs By Reuters


© Reuters. FILE PHOTO: Worker cycles near a factory in Kawasaki’s Keihin Industrial Area

By Daniel Leussink

TOKYO (Reuters) – Japan’s real wages rose for the first time in a year in February, the government said on Tuesday. This was mainly due to the price slowdown as the coronavirus pandemic continued to weigh on the economy.

The health crisis and the steps that have been taken to keep it in check are having a big impact on the world’s third largest economy, which is expected to contract in the first quarter due to weaker consumer spending.

Real wages adjusted for inflation, a key measure of household purchasing power, rose 0.2% in February compared to the same month last year, the Ministry of Labor said on Tuesday.

It was the first increase in real wages, adjusted for inflation, in 12 months after a revised decline of 0.6% in January.

Total nominal cash earnings declined 0.2% year over year in February, for the eleventh consecutive year after a revised 1.3% decline in January.

“Since the fall in prices was greater than the fall in wages, it became positive (February inflation-adjusted wages),” said a health department official.

The official said a relatively low number of winter bonus payments in February compared to the previous month eased pressure on overall nominal cash receipts, which was the smallest decrease in 11 months.

The regular salary – or base salary, which makes up the largest part of total cash income and determines wage growth – rose 0.4% for the second month in a row, after having increased by 0.2% in the previous month, corrected downwards.

Overtime pay, a key indicator of the strength of business activity, declined 9.3% in February compared to the same month last year and fell faster than in January.

Special payments, including winter bonuses, lost 1.0% in February after a decline of 20.4% in January, which was revised down from minus 12.7%.

The Ministry defines “workers” as 1) those who were employed for more than a month in a company that employed more than five people, or 2) those who were employed daily or had less than a month’s contract but had worked in the two months before the survey was carried out more than 18 days in a company with more than five employees.

The full tables can be found on the Department of Labor’s website at: http://www.mhlw.go.jp/english/database/db-l/index.html

($ 1 = 110.4500 yen)

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