Tokyo: Japan’s inflation-adjusted real wage index fell 4.1 pct in January from a year before, as prices rose faster than wages, labor ministry data showed Tuesday.

The real wage index marked the 10th straight month of drop and the fastest decline in eight years and eight months since May 2014, when the index also went down 4.1 pct.

While the fall of the real wage index in May 2014 mainly reflected the effects of the previous month’s consumption tax rate increase from 5 pct to 8 pct, the index’s drop in January was mostly caused by surges in prices for electricity, gas, food and many other items that have shown no sign of easing.

The consumer price index excluding imputed rent, used to calculate the real wage index, climbed 5.1 pct in January from a year earlier.

On the other hand, nominal wages in the reporting month rose by a smaller 0.8 pct, to 276,857 yen per worker. Basic salary rose 0.8 pct, while overtime was up 1.1 pct. Bonuses fell 1.7 pct.

Nominal wages for full-time workers rose 1.3 pct to 360,510 yen on average and those for part-time workers gained 0.8 pct to 98,144 yen.

The proportion of part-time workers among all workers rose 0.46 percentage point to 31.86 pct. This increase was also behind the sluggish growth of nominal wages as part-time workers’ wages are comparatively low.

Overall work hours declined 1.4 pct to 127.7 hours on average.

The data covered businesses with five or more employees.

Expectations for wage increases are growing in Japan before many employers announce their responses to the labor side’s requests next week in this year’s “shunto” spring wage talks.

Shinichiro Kobayashi of Mitsubishi UFJ Research and Consulting Co. said nominal wages are expected to stay on a rising trend.

As prices are also likely to continue to move at high levels, however, Kobayashi said, “A spread of wage increases among small companies would be indispensable for easing the impact of price increases.”

JIJI Press