In Japan, it's getting tougher to make ends meet as wages lag inflation
a growing problem for Prime Minister
Shigeru Ishiba ahead of a key election taking place in about two weeks.
Real wages declined 2.9 per cent from a year earlier in May, compared to economists' consensus call of a 1.7 per cent fall, the labour ministry reported on Monday. Nominal wages rose 1 per cent from the previous year, climbing at a much slower pace than economists expected.
While the drop in real wages shows the pain being felt by voters heading into the election on July 20, the strength in underlying wage trends keeps the Bank of Japan on a path of mulling further interest rate increases.
The sharp drop in real wages highlights the persistent strength of inflation and presents a headache for the minority ruling coalition ahead of the coming upper house election. With prices continuing to rise faster than wages, public frustration has grown, pressuring political leaders to come up with more convincing strategies to alleviate the cost-of-living squeeze.
Japanese Prime Minister Shigeru Ishiba's Liberal Democratic Party has offered cash handouts as an incentive to voters ahead of a looming election. Photo: Kyodo
'In the ongoing election campaign, candidates often cite real wage figures from this monthly report,' said Sota Takano, a senior economist at Itochu Research Institute. 'Today's release suggests people are struggling with the cost of living – that's a discouraging result for Ishiba.'
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