Wages decline for 11th straight month


Wages fell for the 11th month in a row in April, extending their longest losing streak in five years and indicating households will pare spending further in the coming months.

Monthly wages, including overtime and bonuses, dropped 2.5 percent from a year earlier after declining 3.9 percent in March, the fastest pace since July 2002, the Health, Labor and Welfare Ministry said Monday.

Tighter budgets and rising unemployment indicate households will hold back an economy showing signs of emerging from recession. Daiichi Kasei Co. and Toto Ltd. are among companies slashing salaries even as exports and production begin to stabilize.

“We’ll see more visible weakness in consumer spending along with a deterioration in the job market,” said Hiroshi Miyazaki, chief economist at Shinkin Asset Management Co. “Wages won’t grow for a while.”

Daiichi Kasei, a maker of synthetic leather for clothing and sports equipment, began cutting wages for executives and full-time workers in April, according to Tokyo Shoko Research Ltd.

Toto, Japan’s largest maker of toilets and bathroom fixtures, said last month it will reduce executives’ salaries by as much as 10 percent from June through September.

Overtime pay led the decline in wages, sliding 18.8 percent after an unprecedented 20.8 percent drop in March, according to Akira Motokawa, head of the labor ministry’s statistics division.

A rebound in production helped ease a drop in overtime working hours among manufacturers for the first time in 11 months. Extra working hours fell 45.3 percent in April after an unprecedented 48.9 percent plunge in March.

OT plummets 45%

Kyodo News
Average overtime hours per worker at manufacturers dropped 45.3 percent in April from a year earlier, falling for the 13th straight month amid continued output adjustments, the government said Monday.

Average overtime hours, a key gauge of the economic outlook, stood at 9.1 hours at manufacturers with five or more workers, following the biggest percentage fall, 48.9 percent, reported in March.

“The size of the decline became smaller in line with improvements on the manufacturing front,” the Health, Labor and Welfare Ministry said in a preliminary report. Comparable data on overtime hours have been available since 1990.