Japan's real wages in June fell 1.6 percent from a year earlier, declining for the 15th straight month, as salary increases failed to keep up with accelerating inflation, government data showed Tuesday.
The drop in inflation-adjusted wages reflected higher food, energy and other prices on the back of Russia's war in Ukraine, offsetting the impact of the sharpest growth in 30 years at this year's pay negotiations.
Nominal wages, the average total cash earnings per worker, including base and overtime pay, rose 2.3 percent to 462,040 yen ($3,200), increasing for the 18th consecutive month, according to the Ministry of Health, Labor and Welfare.
"We will likely see the effect of wage increases by companies gradually," a labor ministry official said.
Major Japanese companies offered wage hikes of 3.58 percent on average at annual wage negotiations earlier in the year, the highest increase in three decades, in the face of repeated calls by Prime Minister Fumio Kishida for pay rises to cope with inflation.
Consumer inflation, however, accelerated by more than 4 percent at one stage this year and remains above 3 percent. The internal affairs ministry said last month that the rate was up 3.3 percent from a year earlier, driven by surging food and household goods prices.
Separate data showed inflation continued to pressure consumption in June, with the nation's household spending in that month down 4.2 percent from a year earlier, declining for the fourth consecutive month.
Households of two or more people spent an average of 275,545 yen, the Ministry of Internal Affairs and Communications said. On a nominal basis, household spending fell by 0.5 percent.
By category, spending on furniture and home appliances such as air conditioners and washing machines plummeted 17.6 percent from a year earlier, while medical care expenditures plunged 8.5 percent, according to the internal affairs ministry.
"The removal of COVID restrictions by the government led to a decline of stay-at-home demand...at a time when prices are increasing," an internal affairs ministry official said.
In May, the country downgraded the legal status of COVID-19 to the same category as seasonal influenza, marking a major shift in its approach after three years of dealing with the novel coronavirus.
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