Wage in Japan has stayed the same for 30 years

With an upcoming election for the House of Representatives on October 31, Japan’s low growth trend during the “Lost Decades” following the collapse of an economic bubble in the 1990s is garnering attention again. Some criticize that parties have not presented proper growth strategies for the election.

The Asahi Shimbun published an article titled “wage stays stagnant for 30 years” on the first page on Wednesday. According to the Organisation for Economic Co-operation and Development (OECD), Japan’s annual average wage is 38,514 dollars from the perspective of purchasing power parity considering the prices of goods, which is No. 22 among 35 member countries. For the last 30 years since 1990, Japan’s average wage only rose 4.4 percent while South Korea’s soared 90 percent and the U.S.’s and the U.K.’s increased 47.7 percent and 44.2 percent, respectively. South Korea’s annual average wave surpassed Japan’s in 2015 and the gap has been widening. Last year, South Korea’s wave was about 3.9 million won higher than Japan’s.

One of the reasons behind Japan’s stagnant wage is the poor quality of employment, showcased by the fact that the share of non-regular workers almost doubled from about 20 percent in the 1990s. Some point to trauma from the collapse of an economic bubble. “In the 1990s when an economic bubble collapsed, many companies laid off a lot of people and cut salaries and became the subject of criticism. Lately, they have been refraining from raising salaries even with good performance to prevent layoffs and salary cuts in times of crisis,” said Professor Isao Yamamoto of the Department of Commerce and Industry at Keio University.

The overall economy of Japan lacks vitality. According to the International Monetary Fund (IMF), Japan’s nominal GDP was ranked No. 3 last year, following the U.S. and China. Compared to the 1990s, however, the U.S.’s increased 3.5 times and China’s rose 37 times while Japan’s only increased 1.5 times. The GDP of Germany, which was ranked No. 4, rose 2.3 times.


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