Browse > Home / Business, Economic Reports, Labor and Wages / Strong bonuses push wages up 1% in January

Strong bonuses push wages up 1% in January

March 3, 2008
By Ken Worsley


The Ministry of Health, Labour and Welfare released its January Labor Survey today, and there was good news for the nation’s workers, and hopefully for domestic spending, as wages were reported to have been up 1% compared against the same month a year ago, rising to 280,550 yen on average.

1% may not seem like much, but this is the highest monthly increase we’ve seen since June 2006. Higher bonuses drove the wage figures up, with bonuses increasing 12.1% against last year. Excluding bonuses and overtime, wages increased 0.6%, which was the third straight month that they have risen.

Essentially, regular wages, which exclude bonuses and overtime, fell to 248,569 yen, overtime pay rose to 19,359 yen, and bonuses and other teate rose to 12,622 yen.

Those with long memories may recall that bonuses fell over 20% in January 2007, which meant it wasn’t too difficult for them to get pushed higher this January, especially after they fell in both November and December.

Should we be optimistic about wages? For all of 2007, we saw wages fall 0.7%, which means there is still some ground to be made up for. A recently published piece in the Nikkei was pessimistic on wages, stating:

The shrinking population and a decline in staff loyalty, however, now pose a new challenge for employers, which are faced with the tricky job of curbing rises in their paychecks while keeping workers enthusiastic.

Yet, if firms want to keep good people, they are eventually going to learn that not much else makes workers as enthusiastic as receiving a nice pay packet. With courts clamping down on firms that don’t pay overtime (including Toyota and McDonald’s), skittish employers are bound to be a bit more honest in doling out the extra pay. But will they continue to be generous with the overtime itself?

We have to see data for a few more months before deciding that the wage situation is truly improving. With firms struggling to meet higher costs, a continued increase in wages sounds as if it’s going to be a challenge. If wage increases are set to be dependent on better bonuses, we’re not yet going to feel optimistic at all.

Interestingly, workers at real estate firms were hit the hardest, taking a 5.4% pay cut on average in January. This seems fitting; while being led around Tokyo this weekend on a search for a new office space, I could not help but notice the degree to which the realtor’s shoes were worn through. Perhaps he could move into the mining industry, where workers saw their average wage shoot up 7.4% in January.

Filed Under Business, Economic Reports, Labor and Wages 

Social Bookmarks:
del.icio.us:Strong bonuses push wages up 1% in January digg:Strong bonuses push wages up 1% in January newsvine:Strong bonuses push wages up 1% in January furl:Strong bonuses push wages up 1% in January reddit:Strong bonuses push wages up 1% in January
Related Posts:
Japan General Estate to provide management with allowances for eating and drinking sessions with subordinates
Business Conditions, Capital Spending, Industrial Output all Down, Yet Consumer Spending Holding Up
Pay rises not enough to boost spending?
December household spending up 2.2 percent, household income down 2.7 percent
Strong food sales push up Japan’s February department store sales

Comments

2 Responses to “Strong bonuses push wages up 1% in January”

  1. JV on March 4th, 2008 10:44 am

    “Yet, if firms want to keep good people, they are eventually going to learn that not much else makes workers as enthusiastic as receiving a nice pay packet.”

    Unfortunately, I can’t post a link to any info to back this up, but

    Researchers have posited that for all but the lowest wage earners, pay is not the top or even in the top three reasons why people take or stay with a majority of jobs. The reasons that were more important were; benefits, hours, overtime, advancement opportunities, child care, etc.

    I would make a guess that the reason pay is such an issue here in Japan, is because overtime is long, workers cannot take all of their accrued vacation time, there is no child care, and a bunch of other reasons that make work demoralizing. That makes the only thing left worth staying for is the pay. I believe that these very same reasons are why the freeter generation has grown so quickly. That hasn’t been helped by the growth in companies only hiring contract workers either. Why would someone want to be a full time regular employee? For one reason peace of mind. No one wants to look for a job everytime their contract expires because they are not sure of getting an extension or not. Company’s actions and the realities in the labor world in Japan are actually the demoralizing force and not the drop in pay. Just my two cents.

  2. Ken Worsley on March 4th, 2008 5:35 pm

    JV, a link would rock if you could find one.

    I think you’re very right about the conditions in Japan’s labor market. Will firms realize the potential of offering real benefits? Some are, though for others, they might just have to find a way to make their workplaces “not demoralizing”.

Got something to say?