Japan’s Wages Slide, Extending Longest Losing Streak Since 2003

By Toru Fujioka

June 1 (Bloomberg) -- Japan’s wages fell for an 11th month in April, extending their longest losing streak in five years and indicating households will pare spending further in 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 Labor Ministry said today in Tokyo.

Tighter budgets and rising unemployment indicate households will hold back an economy showing signs of emerging from a 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. in Tokyo. “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, last month said 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, today’s report showed.

To contact the reporter on this story: Toru Fujioka in Tokyo at tfujioka1@bloomberg.net