Japan Wage and Hours Worked

Part-time hourly wages reached an all time high of 1012 yen rising by 2.4% YoY in June. Regular wages in Japan rose by 0.7% year on year in May 2017, one of the highest rise over the last 10 years.
 
Published monthly by the Ministry of Health, Labour and Welfare. Updated to the month of May 2017 (published on July 21st, 2017).
Note: Part time hourly wage for June 2017 was published by Recruit Jobs Co.,Ltd on July 13, 2017. Temporary hourly wage for June 2017 was published on July 13 2017
 

Recent data trend

In May 2017, basic and overtime wages, otherwise known as regular wages, rose by 0.7% year on year (YoY). As low as 0.7% may sound, it is one of the highest rise over the last 10 years. Basic wage rose by 0.9% year on year, the highest rise in nearly 20 years since October 1997. After adjusting for consumer price inflation, real wage rose by 0.1% year on year, turning positive from a flat growth in April. 

While the magnitude of wage increases is almost pitiful by global standard, it is still an encouraging sign that the long-awaited wage inflation may be finally happening in Japan. In the last few years, the conspicuous absence of wage inflation despite the tight labor market has been an important puzzle in Japan. At close to 3%, the unemployment rate is at a historic low and most economists agree that the rate is at a level that should ignite an wage inflation. 

It is still premature to judge that a wage inflation is here to stay. After all, wages in Japan have been falling for so long and the recent moderate uptick is almost unnoticable when you see how Japanese wage has performed in the last 10-20 years. However, we note that the economic fundamentals to support a sustined wage rise have been in place for a several years already. The labor shortage in Japan has reached a point where many companies are forced to shorten their business hours because they cannot find people to work for them. It is said that the longer term economic uncertainty are holding back corporate managers from investing in their labor foce despite the short term temptation to raise wages to attract work force. We may be seeing that the latter factor may be finally winning out.

Brief overview of “Wage and Hours worked”

Official name of the statistics is “Monthly Labor Survey”, but we prefer to call it “Wage and Hours worked” to distinguish the survey from “Labor Force Survey” which is the source of the official unemployment rate in Japan. “Wage and Hours worked” surveys enterprises with a work force larger or equal to 5 persons. It also does not include government and municipal officials. For example, in 2012, “Wage and Hours worked” survey covered 45.8 million workers in Japan, while “Labor Force Survey” covered 62.7 million workers. YoY% wage growth rate shows irregularity, as the months of bi-annual bonus payment day shift between months depending on the year. 3 or 6-month average YoY% is often used to overcome this problem. Wages in Japan has been steadily falling in Japan since 1998. Between 1997 and 2012, wages has fallen by 12.5%, or by 0.9% per year on average.

For more information, visit the official government page

"Part time hourly wage", "Temp hourly wage" are statistics published by JOBS Research Center (JBRC), a research center established within Recruit Jobs Co., Ltd. As of July 17, 2015, the original publication are published only in Japanese. Below are a link to their web site (available only in Japanese). http://jbrc.recruitjobs.co.jp/

Wage levels of Full-time and Part-time workers

Temp and part time workers' hourly wage (published by Recruit Jobs)

Note: Part time hourly wage for June 2017 was published by Recruit Jobs Co.,Ltd on July 13, 2017. Temporary hourly wage for June 2017 was published on July 13 2017. See "Brief overview of wage and hours worked" above for more details.

Source: MHLW, JMA.

The Next Release Date: August 4th,2017 (Preliminary June data)

                                     August 23rd, 2017 (Revised June data)

                                     

                                                        

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