Why do wages become more rigid during a recession than during a boom?

Table 1 Changes in CPI by industry

Industry ∖Year	2003	2004	2005	2006
Agriculture	99.6	103.2	100.0	102.0
Communications	108.6	107.3	100.0	96.4
Construction	100.6	100.3	100.0	100.3
Electricity, Gas, Heat Supply, and Water	99.1	99.2	100.0	103.6
Fishery and Forestry	99.6	103.2	100.0	102.0
Manufacturing	100.2	100.3	100.0	100.6
Mining	99.5	99.6	100.0	101.0
Real Estate	100.3	100.1	100.0	100.0
Transport	100.0	100.0	100.0	99.6
Wholesale and Retail Trade	100.2	100.3	100.0	100.6

Note: The base year for CPI is 2005, and the CPI for 2005 is fixed at 100 for each industry. The CPI data was obtained from the consumer price index data by the Statistics Bureau at the Ministry of Internal Affairs and Communications (Statistics Bureau, Ministry of Internal Affairs and Communications 2006). To avoid a potential mismatch between the CPI data and the industry categories used in the survey, the service industry and the “financing and insurance” industries were excluded from the sample. The price index for the mining industry was obtained from the price index data in the Corporate Goods Price Index (Bank of Japan 2006).