Wages Down for Eighth Straight Month, Yosano Says No to Growth, and University Grads Making More This Year

September 5, 2007
By Ken Worsley

In its July 2007 Monthly Labor Survey, the Ministry of Health, Labor and Welfare is reporting that average monthly cash earnings per regular employee in July 2007 were at 386,446 yen, which was 1.9% lower than July of 2006. At the same time, contractual cash earnings were 269,292 yen per employee, which was 0.2% lower than a year ago. The real wage index fell by 1.8% on the year.

This was the eighth consecutive month with a decline in wages, and the steepest fall in three years. Although the fall in wages can be attributed in part to the mass retirement of expensive baby boomers (and their subsequent re-hirings at lower wages), these figures still threaten to put further downward pressure on Japan’s domestic consumption.

Many analysts hold that without wage increases, the economy cannot continue to grow. New Chief Cabinet Secretary Kaoru Yosano, however, seems to be of a different mind. In an interview published in the Sankei Shimbun on Tuesday, he said:

Stabilising prices is very important for everybody’s life and the devilish inflation policy which aims to boost a nominal growth rate would cause people trouble.

Apparently, we now have word from on high that there will be no trickle-down conversion of profits to higher wages. It should also be noted that as a Diet member, Yosano has never been one to shy away from the idea of raising taxes.

To fit some good news in here, the Nikkei also informed us yesterday that according to Nippon Keidanren (the Japan Business Federation), this year’s university graduates have started working with average salaries of 205,074 yen per month, which is 1,354 yen, or 0.66% higher than a year ago. Newly graduated high school students, on the other hand, earned an average of 161,273 yen per month to start. That figure was up 970 yen, or 0.6%, from a year ago.

The number of companies keeping their starting pay for new hires unchanged in 2007 stood at 56.3% - this figure has been steadily declining since it hit 91.4% back in 2003.

Filed Under Business, Labor and Wages