Japan and a decline of 2.6% in real wages under Kishida

Japan and a decline of 2.6% in real wages under Kishida

Kanako Mita and Noriko Watanabe

Modern Tokyo Times

Real wages in Japan declined by 2.6% in October from the previous period twelve months ago. Thus, the cycle of mainly two decades of static wages to small growth, the rise in consumption tax, and price hikes from foodstuffs to utilities have a familiar feel about them. 

This concerns three decades of mainly negative economic news. Hence, people are becoming poorer – in general. However, the current government seeks to double military spending, despite ordinary people merely seeking hope.

In Tokyo (a bellwether for how Japan is doing), consumer prices in 12 months have shot up by 3.6 %. Prices of non-perishable food have risen by 6.7 % and energy prices by 24.4 % in the same timescale. This is the highest increase in four decades and sums up the current government of Japan.

Reuters reports, “Core consumer prices grew 3.6% in October, taking inflation to a 40-year peak, driven by a weaker yen and higher import costs. While core consumer inflation exceeded the Bank of Japan’s 2% target for the seventh straight month in October, weak wages and services prices have kept the central bank cautious about withdrawing stimulus.”

The latest contraction of real wages by 2.6% – the highest since a contraction in the middle of 2015 – sums up how people are becoming poorer. Especially when you include the hike in the consumption tax during the same period. Therefore, inflationary problems in 2022 are furthering the sense of hopelessness for tens of millions of people in Japan.

Lee Jay Walker says, “Prime Minister Fumio Kishida of Japan enjoys his international conventions, criticizing the Russian Federation, and declaring the need to double military spending – despite the highest ratio of debt of any developed nation. Hence, the news that wages have declined by 2.6 percent from one-year earlier sums up Kishida’s aloofness to the life of ordinary people.” 

Kishida – like other past leaders of the ruling Liberal Democratic Party – is implementing another stimulus package. Thus no economic solution can be found outside of printing more money. 

Kyodo News reports, “Outlays on entertainment, hotel stays and package tours grew 8.0 percent, rising for the seventh straight month, following the launch of the subsidy program in October.”

Yes, a stimulus package that boosts wealthier people on the whole. After all, the working poor – and poor elderly pensioners – are struggling to survive and can’t enjoy the luxury of package tours. 

Hence, the debt mountain of Japan merely continues to grow – while Kishida is focused overtly on military spending.

https://www.reuters.com/markets/asia/japan-oct-household-spending-rises-5th-straight-month-2022-12-06/

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