The mediocre wage growth reflects a shift effect – or a rising share of part-time (mostly voluntary part-time) workers in total employment – caused mainly by the increased labor market participation of older adults and housewives, as well as by firms’ high demand for flexible low-cost part-time workers.
The rate of change in per worker wages turned positive from fiscal 2014 onward, but presently remains roughly at around 0.5 percent (or slightly below 1 percent on an hourly basis). To achieve the 2 percent price stability target, it is clear that wages must further increase.