Real wages not falling as much as official data suggest

Real wages haven’t fallen as sharply as the official data released by the Ministry of Health, Labour and Welfare would suggest. Nonetheless, it is striking that workers are not benefitting much from the most pronounced labour shortages since the early 1990s. Workers’ lack of bargaining power may explain why BoJ Governor Ueda seems to be more worried about the hit to consumption resulting from the recent surge in food prices than about any resulting upward pressure on household inflation expectations.