Japanese Workers See Wages Drop Again on Inflation

Japanese wages adjusted for inflation dropped for a sixteenth straight month as Prime Minister Shinzo Abe faces an election focused on his efforts to spur economic growth.  Earning declined 2.8 percent in October from a year earlier, the labor ministry said today, following data last week showing households cut spending for a seventh month.

Abe’s call for companies to use their cash holdings on salaries and investment has been partially met, with capital spending among manufacturers rising while wages change little. He faces voters on Dec. 14 with an economy that fell into recession following a sales-tax increase and opposition parties highlighting the difficulties of low-income earners.

“With the effect of the sales tax hike, I don’t see real wages rising in the financial year through April,” said Toru Suehiro, an economist at Mizuho Securities Co. “People will be asking themselves whether they feel better off, and there probably aren’t that many who think the economy has got better.”


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