With falling prices and falling wages seemingly locked in a deflationary cycle, workers in Japan last year saw their pay fall at the fastest rate in a decade, dropping by 2.2 percent as the Japanese economy defied predictions and hopes that it was stabilizing and instead moved closer to its fourth recession in ten years. Even public sector workers are feeling the pinch, as government officials negotiate wage concessions mirroring or even surpassing private trends in order to cope with tax revenues that have fallen for sixteen months straight as unemployment has risen and wages have fallen. Even taking into account decreasing prices, Japanese workers experienced a 1.2 percent decline in the real value of their monthly wages---the second straight year of decline.
See "Japanese wages fall at fastest rate for decade", DAVID PILLING, Financial Times, February 3, 2003