All articles tagged with #real wages
Japan's real wages fell for the 25th consecutive month in April, declining by 0.7% year-on-year, but the pace of decline has slowed. Analysts expect real wages to turn positive this fiscal year, which is crucial for the Bank of Japan's monetary policy normalization. Despite nominal wages rising and major firms offering significant pay increases, real wages continue to lag behind rising living costs.
Despite positive economic indicators such as low unemployment and decreasing inflation, a majority of Americans express dissatisfaction with the economy. This discontent can be attributed to the decline in real wages, which have significantly decreased in recent years. Claims of rising wages are misleading as they are based on average hourly earnings, which have been skewed by workforce-composition changes during the pandemic. The return of low-paying service jobs has dragged down average hourly earnings growth. Adjusting for the changing composition of the workforce, the National Compensation Survey's Employment Cost Index reveals that inflation-adjusted wages have shrunk by 3.7 percent since the end of 2020, erasing all gains made in the late 2010s. Additionally, rising Treasury yields and interest rates have made it difficult for many Americans to achieve traditional milestones such as homeownership and car ownership. Without a significant boost in productivity or a decrease in energy prices, real wages are likely to continue to stagnate, leaving Americans dissatisfied with the economy.
Sweden's Ministry of Finance predicts a deeper than expected GDP contraction of 1% in 2023 due to a challenging economic environment, worsened by high inflation rates, eroding real wages, and plummeting house prices. The European Commission also predicts negative GDP growth for Sweden in 2023. While inflation rates are starting to cool, Swedish households are unlikely to get much reprieve from the figures, and real wages are lagging behind. Danish Bank recently revised its estimate of a 20% drop in real house prices to a 25% drop, leaving prices still only halfway to the bottom.