Wages for Japanese workers rose but still failed to keep up with inflation. Real wages in Japan fell for a fourth straight year last year, and analysts say it is unclear whether the rebound in the first quarter this year will continue amid oil price uncertainty stemming from the Middle East situation.
According to the finalized Labor Force Survey aggregates that the Ministry of Health, Labor and Welfare released on the 22nd, real wages per worker at corporations with five or more employees fell 0.5% from a year earlier last year. Real wages declined for the fourth consecutive year.
Total cash earnings, which correspond to nominal wages, increased 2.5%. However, the rise in prices offset the effect of wage increases, reducing workers' actual purchasing power.
However, the trend has partly shifted this year. In the first quarter, Japanese workers' real wages rose 1.3% as higher pay from wage hikes coincided with a slowdown in inflation.
The issue is after April. Kyodo News said that although the Japanese government is restraining inflation with policies such as energy subsidies following the Middle East situation, it is uncertain whether the increase in real wages will be sustained if the impact of high oil prices fully kicks in.
The Ministry of Internal Affairs and Communications released consumer price index figures for April the same day, showing a 1.4% increase year over year on a basis excluding fresh food. It stayed below 2% for a third straight month.
Nihon Keizai Shimbun explained that policies such as government oil price subsidies are curbing energy price increases, helping keep inflation relatively low.
In the job market, the job seeker advantage is continuing. As of the 1st of last month, the employment rate for new job seekers who graduated from college this spring was 98.0%. It was the second-highest level since statistics began in 1997, following last year.
Changes are appearing in corporations' hiring methods. A Nikkei survey of 1,270 corporations with hiring plans this year found that 50.3% said they would hire experienced workers rather than new graduates. For the first time since the survey began, the share planning to hire experienced workers exceeded half.
Nikkei analyzed that the spread of artificial intelligence (AI) adoption and a decline in applications from new college graduates due to low birthrates are increasing corporations' preference for mid-career hires.
However, some expect the job market to remain favorable for college graduates for the time being. A representative at the human resources corporation Indeed Recruit Partners told Nikkei, "Considering Japan's age structure, the situation favoring college graduates will continue."