Japan Wage and Hours Worked

In December 2016, total wages rose by mere 0.1% year on year. Wages in Japan has been stubbornly stagnant, despite the prevailing full employment status in the economy.

Published monthly by the Ministry of Health, Labour and Welfare. Updated to the month of December 2016 (published on February 22nd, 2017).

Recent data trend:

The total wage rose by a tad 0.1% YoY in December 2016, down from a 0.5 % growth YoY in the previous month. The regular wage component, consisting of basic and overtime wages registered a 0.3% growth YoY in December 2016, similar to the previous month. In addition, Japan’s real wage dipped by 0.4% YoY in December 2016 marking the severest fall in real wage growth since November 2015. The decline in real wage suggests that the windfall for households from the decline in energy prices are no longer contributing to a rise in real wages. 

Generally, the tightening in labor market conditions should add to an upward pressure on wages, but the mechanism does not seem to be working, at least not fast enough to bring about a sustained reflation any time soon. The corporate profit growth numbers (up 11.5% year on year during July-September 2016 quarter) suggest that employers have the capacity to raise wages but it seems that they are not willing to pass on the benefit of increasing profits to the workers in a form of higher wages. 

A 0.3 % growth in Japan’s nominal wage is insignificant to trigger a general rise in price level to meet the BoJ’s 2% inflation target. To add to this, a recent Reuter’s Poll (conducted January 4-17) indicates that nearly two thirds of the companies do not plan to hike their workers’ wages this year. Such cautious attitude hurt the credibility of Prime Minister Abe’s plan to spur recovery via wage increases.  

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 January 2017 was published by Recruit Jobs Co.,Ltd on February 20, 2017. Temporary hourly wage for January 2017 was published on February 15, 2017. See "Brief overview of wage and hours worked" above for more details.

Source: MHLW, JMA.

The Next Release Date: March 9th,2017 (Preliminary January data)

                                                    March 23rd, 2017 (Revised January data)