Sunday, May 4, 2014

(OT) Bank of Japan's Governor Says Wages in Japan Are Rising

Uh... rising?

In this post-Lehman "New Normal" world, particularly in the so-called developed nations of the US, Japan and EU, 22 straight months of wage decline must mean wages are rising.

Governor Haruhiko Kuroda of Bank of Japan had an exclusive interview with the US's financial news channel CNBC while attending the Asian Development Bank meeting in Kazakhstan.

From the video in the CNBC article (5/4/2014):

Kuroda starts out by declaring that economists have been consistently wrong about Japan in the past twelve months because they have failed to predict the inflation that is actually happening.

Then, at about 1:23,

Susan Li, CNBC: Wages have been down for 22 straight months, and it's not keeping up with the inflation ...

Kuroda: (cutting the interviewer off) But that, that is not true. Actually, wages have started to rise. We expect uh nominal wages uh continue to rise, coupled with improving employment situation, means that employer's (sic) income would increase by about 3%.

I am sure Mr. Kuroda meant "employee". For sure, Japan's employers, particularly large multinationals, are raking in huge revenues, partly thanks to cheapened yen.

Then Kuroda prattles on about employment situation, and Ms. Li drops the topic of wages completely.

So are wages in Japan rising, or falling, in the reality-based world?

22 straight months of decline, from Zero Hedge (4/29/2014):

"monthly wages excluding overtime and bonus payments fell 0.4 percent in March from a year earlier (the biggest drop in 2014), a series of declines which has now stretched to 22 consecutive months."

Reading Japan's Nikkei Shinbun (4/30/2014), you wouldn't know that unless you pay attention to detail. Governor Kuroda wants you to focus on the positive message of "wage increase". Clearly, the "wages" Mr. Kuroda is talking about are wages including overtime pay and bonus:

3月の給与総額、3カ月ぶり増加 残業代増える

Total wages in March increased for the first time in three months, overtime pay increased


According to the monthly labor statistics (preliminary) announced by Ministry of Health, Welfare and Labor on April 30, the average total wages including overtime increased by 0.7% in March compared to a year ago to 276,740 yen [US$2760] . It was the first increase in three months, and the rate of increase was the biggest in two years. The increase was due to the increase in overtime pay, to meet the last-minute demand [for goods and services] before the sales tax increase [on April 1, 2014]. On the other hand, fixed wages, or base wages dropped by 0.4% to 240,656 yen [US$2400], decline of 22 consecutive months.

As far as I know, when comparing wages over time or across different regions/countries, you don't include overtime pay, benefits, or one-time pay like bonuses. But that's not Kuroda BOJ, apparently.

Pick the data that justifies your position, conviction or belief, even if you can't objectively compare that data with anything else. That seems totally normal in post-Obokata Japan. (Maybe Ms. Obokata should have been an economist or a banker, like Mr. Kuroda. Or politician, like Mr. Shinzo "contaminated water at Fukushima I NPP totally controlled" Abe.)


Anonymous said...

thanks for that

Vyse Legendaire said...

You're never going to let this Ms. Obokata meme die are you….::sigh::

Anonymous said...

he's trying at making her very "legendaire" - legendary, sorry, and as for what I know about Japan (uhh, and the rest of the world, actually) it doesn't seem to be a wrong move. Isn't fraud becoming the New World Standard ?
I would fight this, anyway.

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