Japan’s Real Wages Achieve First Increase in a Year As COVID-19 Hits Prices By Reuters

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By Daniel Leussink TOKYO (Reuters) – Japan’s real wages rose for the first time in a year in February, the government said on Tuesday, largely due to weakening prices as the coronavirus pandemic continued to weigh on the economy. . The health crisis and the measures taken to keep it under control are having a major impact on the world’s third-largest economy, which is expected to contract in the first quarter due to weakening consumer spending. Inflation-adjusted real wages, a key measure of household purchasing power, rose 0.2% in February compared to the same month a year earlier, the Labor Ministry said on Tuesday. It was the first rise in inflation-adjusted real wages in 12 months, after a revised 0.6% drop in January. But total nominal cash earnings fell 0.2% in February from a year earlier, for the 11th consecutive month, following a revised 1.3% decline in January. “Since the fall in prices was greater than the fall in wages, (the inflation-adjusted wages for February) turned positive,” said a health ministry official. The official said that a relatively small number of winter bonus payments in February compared to the previous month eased the pressure on total nominal cash earnings, which saw their smallest drop in 11 months. The regular salary, or base salary, which makes up the bulk of total cash earnings and determines a salary trend, increased for the second month in a row, gaining 0.4% after a downwardly revised 0.2% increase. the previous month, according to the data. Overtime pay, a key indicator of the strength of business activity, decreased by 9.3% in February compared to the same month last year, falling at a faster rate than in January. Special payments, which include winter bonuses, lost 1.0% in February after a 20.4% decline in January, which was revised down from minus 12.7%. The ministry defines “workers” as 1) those who were employed for more than a month in a company that employed more than five people, or 2) those who were employed daily or had a contract of less than one month but had worked more than 18 days during the two months prior to the survey, in a company that employs more than five people. For the full tables, see the Ministry of Labor website at: http://www.mhlw.go.jp/english/database/db-l/index.html ($ 1 = 110.4500 yen)

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