Squeaking By on Abenomics

By Joseph Sternberg

July 2 (WSJ) — Preliminary data show cash earnings, including bonuses, rising by 0.8% year-on-year in May. Base pay increased 0.2%, its first rise in around two years. This looks like the “wage surprise” Japanese workers’ purchasing power fell another 3.6% year-on-year in May, after declines throughout much of Mr. Abe’s tenure. This is partly due to the price effects of the consumption-tax hike, and partly due to the import-price inflation stimulated by Mr. Abe’s weak-yen policy. Because Mr. Abe has yet to generate meaningful economic growth, the consumption tax merely redistributes income away from households and toward other government purposes.