Japan’s economic farce has gotten so bad it is becoming painful to even discuss it: first, every newspaper writes effusive, extended articles about how after nearly two years of consecutive declines in base pay praising Abenomics, and then the next month the “increase” is promptly revised lower in a footnote in some article which gets zero to no prominence, which however continues to reaffirm that Abenomics is an absolute, unmitigated disaster. Sure enough this is what happened today, when last month’s bombastic “Japan Base Wages Rise for First Time in Nearly Two Years” can now be retracted and instead replaced with this: “regular pay slipped an annual 0.3 percent in February, falling for a 21st straight month after a 0.2 percent slip the previous month.“
And what’s worse, real wages, which take into account consumer inflation, dropped an annual 1.9 percent in February, down for a eighth straight month.
So much for forcing companies to boost worker wages (which many have agreed to, boosting monthly pay by 2000 Yen, or about 4 BigMacs). By now even the most clueless economist PhDs (i.e., all of them), should be aware that as long as there is no sustained wage growth, Japan can have all the inflation it wants – it simply means that even less consumption will take place. Add the imminent sales tax hike into the equation and suddenly the specter of all out recession, even as the Nikkei continues to soar solely due to currency collapse, becomes an all too real possibility.
