Japan October wages up just 0.1 percent year on year, disappointing to PM Abe

TOKYO Mon Dec 2, 2013 8:32pm EST

A man uses a smartphone on a street in Tokyo November 21, 2013. REUTERS/Issei Kato

A man uses a smartphone on a street in Tokyo November 21, 2013.

Credit: Reuters/Issei Kato

TOKYO (Reuters) - Japanese wage earners' total cash earnings edged up 0.1 percent year-on-year in October, marking the first gain in four months but underlining companies' wariness to implement substantial wage hikes needed to sustain economic growth.

Overtime pay, a barometer of strength in corporate activity, rose 5.4 percent in the year to October, up for a seventh straight month, with a 9.8 percent gain in overtime at manufacturers, both logging their biggest increases since May 2012.

However, a slide in regular pay as well as an increase in low-wage part-timers dragged down overall pay, data from the labor ministry showed on Tuesday.

Sluggish wages are discouraging to Prime Minister Shinzo Abe, who has urged firms to raise salaries to create a virtuous cycle of higher incomes and consumption, bigger corporate profits and investment that ultimately would end 15 years of deflation.

Regular pay slipped 0.4 percent, down for the 17th month in a row, in a sign a sustained rise in wages is far from assured.

"Wages remain firm although the pace of gains are not accelerating," a ministry official said.

"We expect wages will be picking up from now on as well, albeit moderately, although a rising number of part-timers puts a lid on overall figures."

The central bank considers wage growth as crucial in its battle to beat deflation and meet its target of achieving 2 percent inflation in roughly two years, though many economists think that timeframe is too ambitious.

The labor ministry defines "workers" as 1) those who are employed for more than one month at a firm that employs more than five people, or 2) those who are employed on a daily basis or have less than a one-month contract but had worked more than 18 days during the two months before the survey was conducted at a firm that employs more than five people.

To view the full tables, see the ministry's website at:

here

(Reporting by Tetsushi Kajimoto; Editing by Kim Coghill)

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