Industries Where Wages Rose or Fell Over 30 Years — Real Wages by Industry in One Chart
Japan's real wages peaked in 1997 and have been falling across all industries on average — but the story varies sharply by sector. IT & telecom has trended upward over the long term, while hospitality and food service has hit new lows across 30 years. This article reads the structural causes through industry-level data.
TL;DR
- The all-industry average real wage peaked in 1997 and has not recovered as of 2024
- IT & telecom and finance show wage growth trends, while hospitality and retail remain in long-term stagnation — a stark contrast
- The 2024 spring wage negotiations delivered 5%+ increases at major firms, but rising prices have kept real wages negative
What is Happening
The all-industry real wage average is below its 1997 level, but divergence across industries is sharp
The claim that "Japan's wages have not risen for 30 years" is broadly accurate when looking at the all-industry average. But breaking the data down by industry reveals a clear divergence: sectors where wages grew over 30 years versus sectors where they fell.
The all-industry average real wage index recorded −0.2% year-on-year in 2024, marking the third consecutive year of decline (JILPT). Real wages peaked around 1997–1998, and a long-term downward trend has continued since.
Industry-by-industry, the directions diverge sharply. IT & telecom has shown a clear upward trend since the 2010s, with an estimated 30–40% increase from the 1997 baseline. Finance and insurance has maintained high levels. By contrast, accommodation and food services has continued setting new lows across 30 years, with an estimated real decline of 20–30% below the 1997 baseline.
Looking at scheduled cash earnings by industry in 2024, electricity and gas topped the list at ¥4.375M/year, finance and insurance at ¥4.106M/year, while accommodation and food services stood at ¥2.695M/year — the lowest level (MHLW). The gap amounts to approximately ¥1.68M per year.
Background and Context
Thirty years of structural change — deflation, casualization, and industrial hollowing-out — underlie the wage decline
30 Years of Structural Change: Deflation, Casualization, Industrial Hollowing-Out
Multiple structural factors have compounded to drive the decline in all-industry real wages since 1997.
First, prolonged deflation. In a deflationary environment, businesses struggle to pass on costs, and wage suppression continues. Second, expansion of non-regular employment. From the late 1990s through the 2000s, the share of non-regular workers surged (now approximately 38% of the total), and the wage gap between regular and non-regular workers has dragged down the overall average. Third, manufacturing hollowing-out. As production bases moved offshore, opportunities to increase domestic manufacturing value added were lost.
Why IT & Telecom Wages Have Continued Rising
The reasons IT & telecom wages have maintained an upward trajectory are clear. As digital transformation (DX) investment intensified, demand for engineers, data scientists, and cloud architects surged — while domestic supply failed to keep pace. In 2024, wage increase responses exceeding 5% were reported one after another in the IT & telecom sector. The market principle — scarcity of talent raises bargaining power — has functioned here.
The Structural Reasons Hospitality Remains at the Lowest Level
The low-wage structure in accommodation and food services involves multiple overlapping factors. The non-regular employment rate is high (part-time and casual workers are the majority), labor-intensive operations make productivity improvement difficult, and the competitive environment makes price pass-through to consumers challenging. According to Rengo's Wage Report 2023, retail, food and beverage, and accommodation have followed a consistently downward trend, though a reversal upward has begun since 2016 (Rengo). Minimum wage increases have provided a floor, but rising prices have offset the gains in real terms.
Reading the Structure
The wage gap is a structural outcome of accumulated differences in productivity, pricing power, and talent scarcity
Inter-industry real wage gaps may appear on the surface to be a matter of "industry choice." Structurally, however, they are the accumulated outcome of gaps in productivity, pricing power, and talent scarcity.
High wages in IT & telecom reflect the compounding of high-value-added service productivity and bargaining leverage from talent scarcity. Low wages in hospitality are determined by a structure in which labor-intensive operations resist productivity gains and consumer pricing power is low. Long-term stagnation in manufacturing (especially small and mid-sized firms) reflects a cost structure that cannot pass rising raw material costs downstream, combined with casualization.
The 2024 spring wage negotiations saw the highest nominal increases in 33 years (5%+) at major firms, but with the consumer price index running at 3–4%, real wages remain negative. Resolving this "nominal increase, real negative" situation requires two conditions: spreading wage increases to smaller firms and non-regular workers, and stabilizing prices.
The message from 30 years of industry-level wage data is singular: it was not that "wages failed to rise" — it was that industries structurally capable of rising and those structurally unable to rise diverged. Without confronting the underlying gaps in productivity, scarcity, and pricing power, the policy goal of a broad-based wage floor will remain out of reach.
Related Columns
- Non-Regular Employment as a Choice — The Evolution of Employment Forms and Work Diversity
- A Data Analysis of the 744 'At-Risk' Municipalities — The Structure That Tokyo Siphons
Related Guides
References
Real Wage Index Negative for Third Consecutive Year — JILPT. JILPT Labor Situation, March 2025
Wages by Industry and Company Size — JILPT. JILPT Labor Situation, May 2024
FY2024 Basic Survey on Wage Structure — Ministry of Health, Labour and Welfare. Ministry of Health, Labour and Welfare
Wage Report 2023 — Japanese Trade Union Confederation (Rengo). Rengo
Trends in Nominal and Real Wages (Annual Report on Japanese Economy and Public Finance 2022) — Cabinet Office. Cabinet Office
