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Economy

Doubts persist over Japan's claim of wage growth for 2018

Report of 0.2% rise tainted by ministry's data omission

The labor ministry said real wages rose in 2018, but questions linger regarding its methodology in determining the increase.

TOKYO – Japan’s labor ministry announced Friday that wages adjusted for inflation rose 0.2% in 2018, but its failure to release key comparison data has raised questions about the rosy claim from a scandal-plagued ministry.

Total cash wages rose 1.4% on the year in 2018, surpassing the 1.2% rise in prices, according to the ministry's report. But the ministry did not release data comparing only the wages of the past two years at the same companies, figures viewed as a crucial economic indicator by the Home Affairs Ministry’s Statistics Bureau.

Opposition lawmakers immediately denounced the omission at a Diet hearing Friday and said they came up with a 0.4% drop in wages based on reference numbers released by the ministry. "They simply do not want to release it," said one member.

The labor ministry said it did not publish the figures because ongoing changes in the surveyed companies made long-term comparisons impossible. The ministry did release nominal wages as reference data.

In its monthly labor survey from 2004 to 2017, the ministry undercounted large businesses with 500 employees or more, which typically pay more than smaller ones. This dragged down wage estimates across the country.

Officials modified their methodology last year, with the result that wages appeared to jump significantly from 2017. But with the same modifications applied to previous years, last year's pay hikes were less dramatic.

Meanwhile, the ex-director general of statistics, dismissed over the data scandal, appeared in the Diet on Friday and admitted that he did not inform his superior of the faulty data until five days after he learned of the problem. Opposition lawmakers said the delay suggests a cover-up attempt.

The discovery of the faulty data necessitated adjustments to unemployment benefits, forcing the government to revise the fiscal 2019 budget, which had already been approved by the cabinet.

The fallout from the data scandal is cutting into parliamentary debate time and has given the opposition an opening to attack Prime Minister Shinzo Abe ahead of upper house elections this summer. It also casts doubts on the government's success in raising wages.

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