TOKYO - Wages are rising in Japan more than they have in decades, at least for some workers. But so are prices, leaving many people feeling they must scrimp more than ever.
In May, the consumer price index was up 3.2% from a year earlier, well above the central bank’s target of about 2%. That’s great news for policymakers trying to get the world’s third largest economy out of the doldrums by keeping credit super cheap to spur demand and push prices higher.
But a government survey of companies with five or more employees found real wages, taking into account higher prices, fell 3% from the a year earlier in April, marking the 13th straight month of declines.
Although all the major companies have raised wages this year, with large labor union members landing a 4% hike, the highest in 30 years, a quarter of small and medium-size businesses — employers of more than two-thirds of all workers — gave no pay raises, according to the think tank Tokyo Shoko Research.
Wages should rise as companies compete for a shrinking pool of workers in a country where the labor force is aging fast and the population is declining. The most recent data showed 128 jobs for every 100 job seekers.
But instead companies have sought to avoid raising costs by hiring women, students, retirees or foreigners, often on lower paying contracts that don’t include the same benefits as those given to regular employees. ...continue reading
