It's important to realize that this article is by Eamonn Fingleton, who has been pushing a fixed idea for decades now: that Japan is secretly a terrifying power. He has written several books that touch (in whole or in part) on this theme:
I read Blindside back in 1996 and I thought his argument was interesting for that time. However, when you read him, it is important to remember that he has not changed his opinion in 20 years, and there are new facts to be accounted for. At that time he seemed certain that Japan would be the worlds #1 economy by the year 2000. His prediction was wrong, but he has not much changed his opinion: he still believes Japan is an important success story.
Japan suffered a long depression in the 1990s. That is not fiction. That is a fact. However, it is also true that some of the stagnation of the period 1990-2013 should be attributed to demographic change.
Paul Krugman offered a partial counter-argument to Eamonn Fingleton here:
Also, it is worth noting that for the last 20 years Fingleton has constantly harped on the fact that Japan has a trade surplus, sometimes a very large trade surplus, and he thinks this represents economic strength. Numerous economists have made the point that a large trade surplus can be a sign of economic weakness: perpetual insufficient demand at home in the domestic market. Fingleton has rarely taken this view into account.
Michael Crichton was excellent for identifying the latest "worry" that was making the US anxious (sexual harrassment, nano-technology etc) and writing a novel about them.
Rising Sun was written when a lot of people were worried that Japan would overtake the US as an economic power. We all know how that turned out. It's also why I'm sceptical when people talk about China being the next economic superpower.
>Numerous economists have made the point that a large trade surplus can be a sign of economic weakness
Exports are real costs, imports are real benefits. A trade surplus can help you keep net government spending low, but there's nothing positive about that in and of itself.
This is a good read about the real problems, lack of aggregate demand. Everytime government spending gets high enough to lift GDP, they pull the rug out from under the economy by raising taxes. A process they're looking to continue.
> Ordinarily, a decline in working-age population — and, thus, a decline in the
supply of workers — would tighten the labor market and cause the unemployment rate
to fall; in Japan’s case, however, the gradual rise in the unemployment rate and tepid job growth is occurring in spite of these demographic shifts, reflecting economic stagnation and weakness in aggregate demand.
We should maybe be a bit careful with competitive nationalist rhetoric. Japan has US military bases; it is in some loose sense an occupied nation. It's doing reasonably ok because we let it. (Imagine if the US had Chinese military bases, for "protection".) Japan is naturally kept from being too independent, but may be treated fine if obedient. (http://en.wikipedia.org/wiki/United_States_Forces_Japan)
On the dissident end, it's common knowledge that Japan's weakness has been overstated. Left Business Observer interviewed Fingleton (http://www.leftbusinessobserver.com/Radio.html#S130530), and Chomsky often mentions it.
Adjusting for working age population shows a similar trend. And if data doesn't work for you then there's a ton of other signs that the economy is not doing well:
- Interest rates have been stuck against the zero lower bound
- Stock market is 1/4 of what it was at it's peak
- Property values have still not recovered in major cities
- Debt as a percentage of GDP has ballooned to over 200%
Now with that being said - if I had to choose a country to spend two lost decades in, it would be Japan. Local savers have allowed them to issue debt at very low interest rates which has been able to cover shortfalls. And there is signs that Abenomics is taking hold.
TL/DR: Worker productivity in Japan is high and has risen like all other western countries. Other factors, like lacklustre respons to zombie banks, must explain "lost decade".
I look at the Penn World Table.
In:
* Real Income per Population,
* Real Income per Employed Population, and
* Real Income per Employed Work Hour
Japan has lagged the USA pretty consistently. That is consistent with all other major economic countries. In the '90s Japan actually outperformed on the Income per Worked Hour.
That means there are still 99 problems left for the Japanse economy, but worker productivity ain't one.
Still zombie banks and government reponse to zombie banks might have created a consumption crisis (just as, for example in the Netherlands at this moment, consumers must pay for increasing bank buffers), but I would venture that corporations have retained profitability through the crisis.
Japan didn't grow compared to it's neighbours. But that's catch-up growth for Korea and China. You can't blame Japan for already being first-world in 1990.
Stock market isn't a good indicator for welfare of general population. Japan just might have been overvalued, or other countries overvalued. Property markets have gone beserk pretty much first worldwide, only in Japan first. Another pointer that we are just mimicing their banking crisis.
Also, he mentions (low) cost of borrowing as a key point to his thesis, but my understanding is that the cost of borrowing for Japan is heavily influenced by domestic savings.
IIRC, a lot of the money "borrowed" are the contents of the postal savings accounts (or whatever they are) of elderly Japanese who are extremely conservative investors. I have further seen it commented that there will be complications when that sect of the population switches to net withdrawls as they near end of life or pass on inheritance, etc.
It's always hard to tell what's really happening behind the GDP growth figures when comparing countries. The population of US and UK are currently increasing around 0.7% a year, while Germany is around 0%. That's a lot of additional GDP growth for both UK and US, even when excluding the fact that immigrants are at their prime working age and usually more beneficial for the GDP than an average citizen. This has a fairly big impact on what's seen on the news. Since depression is defined as two consecutive quarters of negative growth, it's much easier for countries like US and UK to avoid "official" depression, and much easier for news outlets to talk about the "stagnating old Europe" or such; and of course, at the same time the living standard of an average German might be increasing and that of a UK/US citizen decreasing.
I cannot see several administrations plus the upper echelons of corporate Tokyo agreeing for two decades to "pull the wool over the world's eyes".
But I also can see that Japan is not a basket case, and indeed is doing well for a world in recession.
So, the question I have is what is the meme - presumably there is some lie that Japan tells itself, that means when a variety of people speak they agree "our economy is in bad shape, we have lost a decade" even if on many measures its not true.
As a Brit, our government would love Japan's growth rates or export levels. But we tell ourselves memes, about a special relationship with US, about European bureaucrats, about recovery being linked to house prices - well, I think we do, but its like a fish trying to describe the colour of water.
Interested in hearing from some Japanese fish, as it were.
I can only speak from the people I've met personally, but:
Older people are worried that all of Japans 'gijyutsu' is going to China now (which literally means, art, or craft, but basically they mean, all making-new-stuff skills are going to china now). Especially the retired folk seem really concerned about it.
Young people complain like crazy they can't get decent jobs.
I think you'd be hard pushed to find someone who are generally speaking positive about the Japanese economy over there.
I certainly didn't encounter anyone (Japanese) who was positive about it when I was there (a year ago now), or met anyone who has been here since.
It'd be pretty interesting to see some japanese news paper / blog sentiment analysis work and see how wide spread that goes in general. You could probably use kanji as a pretty decent marker (negative words tend to make common elements, etc). hm...
tl;dr Japanese stock market was way overvalued so it had to crash but industries have grown since then. Japanese officials were complicit in spreading the story that they are in a bad shape so that trade barriers on import don't have to be lifted. Per capita, they are doing just fine.
Strange he didn't mention women entering the workforce when he talked about demographics and the US increasing workforce, just about every article I have read about Nippon's economic stagnation does.
Perhaps because it is too taboo to suggest the feminist revolution was unnecessary, that we could have achieved both economic success and personal wellbeing without it, as Japan had apparently demonstrated.
So we continue to perpetuate the myth that Japan is on the verge of death - I even recall a UN committee calling for "urgent" gender equality to stave off economic disaster - it was the "only way" Japan could regain growth.
> Perhaps because it is too taboo to suggest the feminist revolution was unnecessary, that we could have achieved both economic success and personal wellbeing without it, as Japan had apparently demonstrated.
tl;dr -- whether "lost decades" is a misnomer or not, evidence on the ground suggests something is going on, and it doesn't seem to be good.
Some anecdotes from someone who has lived and worked in Japan on and off for about half of the past two decades:
- The quality and quantity of jobs available to young people have dropped precipitously. Twenty years ago, university graduates from good schools seemed to have a choice of offers from high-prestige jobs (the one's they were after) like banks, megacorps, airlines, etc. These days, you see some good graduates selecting from much farther down the prestige chain (e.g., small, local corp., cram school teacher, etc.) with fewer choices (if any).
- The overall quality of students seems to be lower in schools that have the same prestige. Even Todai and Kyodai students, while still impressive, don't seem to be what they used to be socially, intellectually, or academically. This isn't really directly related to the economy, but the universities are the feeders into the economy.
- The corporate folks seem to complain that the quality of applicant has dropped over the past two decades, and the quality has sometimes dropped (they say) to a point below a threshold of acceptability. As such, they do not hire, hire temps, or hold their nose and hire. Some of this is certainly hubris, but none of it bodes well for the workers, the corporations, or the economy.
- The number of small businesses seems to have dropped precipitously. The most obvious is bars/snacks and restaurants (e.g., once popular nightspots now seem dead even on their busiest nights), but the number of small support businesses (e.g., small light industrial shops, distributors, etc.) seem to have decreased as well. Some of this is due to legal changes that took away legally-mandated middlemen, but other parts of it seem to be due to lack of demand.
- Everyone is worried about money and jobs.
- The famous savers of Japan seem to be mostly the folks in their 50s and higher (maybe 40s), but the folks in their 30s and younger seem to be mooching A LOT off of these savings and not really saving as much on their own.
- There is a massive generational gap between people who came of age before the bubble crashed and those who came of age after. The older folks seem to think that the younger people are lazy and just need to be more disciplined, and the younger people think the older generation just don't get the new economic reality. This tension is ripping the social fabric of Japan and seems to create a lot of inefficiencies.
- The velocity of money seems a lot lower. If folks are interested, I can give some examples in a follow-up post.
This is one of my favorite anecdotes about Japan that does a good job of exemplifying some of the changes that have happened in Japan over the past two or three decades.
Before my time in Japan, maybe up to some point in the 80s, alcohol distribution was heavily regulated. I am not sure how the regs worked, but during the regulation period, there were about 7 or 8 hands touching a beer between the time it left the factory and the time it reached the consumer. Each of these hands took a cut. After deregulation, it dropped to about 2 or 3 hands, although the prices didn't really seem to change. If I recall correctly, this delayering was made due to clamoring by "the West" that Japan's market was insulated, overregulated, protected, inefficient, etc. All of these claims were pretty much true.
The rest of the story that largely went untold at the time in western media (even in relatively informed higher brow publications like The Economist), was that this "inefficiency" effectively served as a social welfare net for the country in some obvious and not-so-obvious ways. Specifically:
- Each of those layers of distribution created direct jobs. Some of these jobs were still needed after deregulation but in fewer numbers (e.g., delivery guys, warehouse folks, logistics managers, etc.), but some were not (e.g., most management positions that could be REALLY good for social connections but not actually needed to get the alcohol from one place to another).
- Each of those layers were socially obligated to do some business with companies farther down the chain. A simple example is that a mid-level distribution company would make sure to hold their enkai parties at a restaurant/bar that is a client of a client of theirs. The owner of a typical bottom-level liquor distributorship (I have befriended a few) would visit 1-3 of their clients for a drink and maybe some food each night for 3-5 nights a week. It was an expected part of greasing the wheels of the economy.
The loss of these layers, a often times the loss of the high-touch layer of distribution to discount "wholesalers", meant that the money cycled fewer times in the economy.
Liquor distribution may seem like an obvious example, but this type of delayering has happened throughout the economy, and the backscratching patronage has decreased along with it. Without getting into a discussion of velocity of money, I would say that this has had a pronounced negative impact on the economy because the money just isn't cycling as much. Unfortunately this is sometimes happening by design.
For those economically inclined, I don't want to suggest that the inefficient alcohol distribution system should have stayed in place. Maybe it should have, maybe it shouldn't have -- that actually gets into a tricky discussion about the weak or non-existent welfare programs in Japan and how this leads to an inability to deconstruct and reconstruct some areas of the domestic economy. My main point is that I don't think anyone had a right to be surprised that the domestic economy took a long and big hit when a high-velocity system was replaced with a low-velocity system with no other social or political changes made to pick up the slack.
Twenty years ago, middle class workers went out quite a bit more often and quite a bit more luxuriously than they do now. Some examples:
- The typical end-of-year party (bounenkai) 20 years ago at a some small-sized (20-30 people) organization I knew and/or worked at would cost about $150-$400. These days, it's more like $50-$100.
- After a big party in the 90s, you would frequently go to a second, third, and fourth parties. Now you often only go to one or maybe even to none. Total cost per person for these big parties and after-parties were often in the $500-$1000 range.
- There number of "big" parties used to be much higher 20 years ago than they are now. As a simple example, some places that used to have 3 or 4 a year now only have 1.
- There used to be a lot of parties throughout the year -- maybe a small party for a small win like reaching a milestone in a project, maybe a small and wild off-the-hook party for a promotion (e.g., kachou, buchou, etc.). These are largely gone or toned down significantly.
Note that these are for middle class folks, which is basically all of Japan. Multiply these seemingly small figures by the multitudes of small offices and organizations throughout Japan. This guts the service industry. As I mentioned before, the number of bars, snacks, and small restaurants seems to have fallen precipitously. Those closed shops are a big reduction of unskilled or semi-skilled jobs and a reduced velocity of money.
[Interesting side note: There were no shortage of owners of small/tiny bars who made $X00,000 annual incomes in the 90s. These low-prestige jobs clobbered the typical salaryman wage, but most "smart kids" were not willing to start bars because it was largely stigmatized. For some reason, jobs at "normal" bars were grouped with jobs at "hostess" bars.]
Also note that a lot of times these modest expenditures are not being made due to limited finances -- a lot of these people have really stable jobs and make really good money. Rather, it seems like there is a perceived need to be more frugal. Perhaps this is due to social pressures, perhaps this is due to irrational fears, perhaps it's just more efficient.
[+] [-] lkrubner|12 years ago|reply
http://www.amazon.com/s/ref=nb_sb_noss_1?url=search-alias%3D...
I read Blindside back in 1996 and I thought his argument was interesting for that time. However, when you read him, it is important to remember that he has not changed his opinion in 20 years, and there are new facts to be accounted for. At that time he seemed certain that Japan would be the worlds #1 economy by the year 2000. His prediction was wrong, but he has not much changed his opinion: he still believes Japan is an important success story.
Japan suffered a long depression in the 1990s. That is not fiction. That is a fact. However, it is also true that some of the stagnation of the period 1990-2013 should be attributed to demographic change.
Paul Krugman offered a partial counter-argument to Eamonn Fingleton here:
http://krugman.blogs.nytimes.com/2012/01/09/japan-reconsider...
Also, it is worth noting that for the last 20 years Fingleton has constantly harped on the fact that Japan has a trade surplus, sometimes a very large trade surplus, and he thinks this represents economic strength. Numerous economists have made the point that a large trade surplus can be a sign of economic weakness: perpetual insufficient demand at home in the domestic market. Fingleton has rarely taken this view into account.
[+] [-] tezza|12 years ago|reply
* Zombie giant banks, addicted to bailouts
* Currency pushed and pulled by Yen carry trade
* Complete efficiency collapse. Workers work very long hours accomplishing little
* Eye watering debt ( worlds largest on many measures )
[+] [-] gadders|12 years ago|reply
Rising Sun was written when a lot of people were worried that Japan would overtake the US as an economic power. We all know how that turned out. It's also why I'm sceptical when people talk about China being the next economic superpower.
[+] [-] kaonashi|12 years ago|reply
Exports are real costs, imports are real benefits. A trade surplus can help you keep net government spending low, but there's nothing positive about that in and of itself.
This is a good read about the real problems, lack of aggregate demand. Everytime government spending gets high enough to lift GDP, they pull the rug out from under the economy by raising taxes. A process they're looking to continue.
http://www.inginvestment.com/idc/groups/commentary/documents...
> Ordinarily, a decline in working-age population — and, thus, a decline in the supply of workers — would tighten the labor market and cause the unemployment rate to fall; in Japan’s case, however, the gradual rise in the unemployment rate and tepid job growth is occurring in spite of these demographic shifts, reflecting economic stagnation and weakness in aggregate demand.
[+] [-] calibraxis|12 years ago|reply
On the dissident end, it's common knowledge that Japan's weakness has been overstated. Left Business Observer interviewed Fingleton (http://www.leftbusinessobserver.com/Radio.html#S130530), and Chomsky often mentions it.
(Never dug into the motivation though.)
[+] [-] gwern|12 years ago|reply
[+] [-] cenhyperion|12 years ago|reply
[+] [-] dev_jim|12 years ago|reply
https://www.google.com/search?q=japan+GDP
Adjusting for working age population shows a similar trend. And if data doesn't work for you then there's a ton of other signs that the economy is not doing well:
- Interest rates have been stuck against the zero lower bound
- Stock market is 1/4 of what it was at it's peak
- Property values have still not recovered in major cities
- Debt as a percentage of GDP has ballooned to over 200%
Now with that being said - if I had to choose a country to spend two lost decades in, it would be Japan. Local savers have allowed them to issue debt at very low interest rates which has been able to cover shortfalls. And there is signs that Abenomics is taking hold.
[+] [-] wjnc|12 years ago|reply
I look at the Penn World Table.
In: * Real Income per Population, * Real Income per Employed Population, and * Real Income per Employed Work Hour
Japan has lagged the USA pretty consistently. That is consistent with all other major economic countries. In the '90s Japan actually outperformed on the Income per Worked Hour.
That means there are still 99 problems left for the Japanse economy, but worker productivity ain't one.
Still zombie banks and government reponse to zombie banks might have created a consumption crisis (just as, for example in the Netherlands at this moment, consumers must pay for increasing bank buffers), but I would venture that corporations have retained profitability through the crisis.
Japan didn't grow compared to it's neighbours. But that's catch-up growth for Korea and China. You can't blame Japan for already being first-world in 1990.
Stock market isn't a good indicator for welfare of general population. Japan just might have been overvalued, or other countries overvalued. Property markets have gone beserk pretty much first worldwide, only in Japan first. Another pointer that we are just mimicing their banking crisis.
[+] [-] rsync|12 years ago|reply
IIRC, a lot of the money "borrowed" are the contents of the postal savings accounts (or whatever they are) of elderly Japanese who are extremely conservative investors. I have further seen it commented that there will be complications when that sect of the population switches to net withdrawls as they near end of life or pass on inheritance, etc.
[+] [-] kaonashi|12 years ago|reply
Doesn't sound so bad when you phrase it that way.
[+] [-] tsiki|12 years ago|reply
[+] [-] ekianjo|12 years ago|reply
[+] [-] agilebyte|12 years ago|reply
[+] [-] lifeisstillgood|12 years ago|reply
But I also can see that Japan is not a basket case, and indeed is doing well for a world in recession.
So, the question I have is what is the meme - presumably there is some lie that Japan tells itself, that means when a variety of people speak they agree "our economy is in bad shape, we have lost a decade" even if on many measures its not true.
As a Brit, our government would love Japan's growth rates or export levels. But we tell ourselves memes, about a special relationship with US, about European bureaucrats, about recovery being linked to house prices - well, I think we do, but its like a fish trying to describe the colour of water.
Interested in hearing from some Japanese fish, as it were.
[+] [-] shadowmint|12 years ago|reply
Older people are worried that all of Japans 'gijyutsu' is going to China now (which literally means, art, or craft, but basically they mean, all making-new-stuff skills are going to china now). Especially the retired folk seem really concerned about it.
Young people complain like crazy they can't get decent jobs.
I think you'd be hard pushed to find someone who are generally speaking positive about the Japanese economy over there.
I certainly didn't encounter anyone (Japanese) who was positive about it when I was there (a year ago now), or met anyone who has been here since.
It'd be pretty interesting to see some japanese news paper / blog sentiment analysis work and see how wide spread that goes in general. You could probably use kanji as a pretty decent marker (negative words tend to make common elements, etc). hm...
[+] [-] guard-of-terra|12 years ago|reply
Guess what, people in Japan don't care about how their economic perform once it is decoupled from their well-being.
And that's what he is suggesting: output grows, all that matters.
[+] [-] agilebyte|12 years ago|reply
[+] [-] smegel|12 years ago|reply
Perhaps because it is too taboo to suggest the feminist revolution was unnecessary, that we could have achieved both economic success and personal wellbeing without it, as Japan had apparently demonstrated.
So we continue to perpetuate the myth that Japan is on the verge of death - I even recall a UN committee calling for "urgent" gender equality to stave off economic disaster - it was the "only way" Japan could regain growth.
Perhaps not.
[+] [-] rayiner|12 years ago|reply
Utterly ridiculous definition of "unnecessary."
[+] [-] cryofan|12 years ago|reply
[deleted]
[+] [-] csa|12 years ago|reply
Some anecdotes from someone who has lived and worked in Japan on and off for about half of the past two decades:
- The quality and quantity of jobs available to young people have dropped precipitously. Twenty years ago, university graduates from good schools seemed to have a choice of offers from high-prestige jobs (the one's they were after) like banks, megacorps, airlines, etc. These days, you see some good graduates selecting from much farther down the prestige chain (e.g., small, local corp., cram school teacher, etc.) with fewer choices (if any).
- The overall quality of students seems to be lower in schools that have the same prestige. Even Todai and Kyodai students, while still impressive, don't seem to be what they used to be socially, intellectually, or academically. This isn't really directly related to the economy, but the universities are the feeders into the economy.
- The corporate folks seem to complain that the quality of applicant has dropped over the past two decades, and the quality has sometimes dropped (they say) to a point below a threshold of acceptability. As such, they do not hire, hire temps, or hold their nose and hire. Some of this is certainly hubris, but none of it bodes well for the workers, the corporations, or the economy.
- The number of small businesses seems to have dropped precipitously. The most obvious is bars/snacks and restaurants (e.g., once popular nightspots now seem dead even on their busiest nights), but the number of small support businesses (e.g., small light industrial shops, distributors, etc.) seem to have decreased as well. Some of this is due to legal changes that took away legally-mandated middlemen, but other parts of it seem to be due to lack of demand.
- Everyone is worried about money and jobs.
- The famous savers of Japan seem to be mostly the folks in their 50s and higher (maybe 40s), but the folks in their 30s and younger seem to be mooching A LOT off of these savings and not really saving as much on their own.
- There is a massive generational gap between people who came of age before the bubble crashed and those who came of age after. The older folks seem to think that the younger people are lazy and just need to be more disciplined, and the younger people think the older generation just don't get the new economic reality. This tension is ripping the social fabric of Japan and seems to create a lot of inefficiencies.
- The velocity of money seems a lot lower. If folks are interested, I can give some examples in a follow-up post.
[+] [-] csa|12 years ago|reply
This is one of my favorite anecdotes about Japan that does a good job of exemplifying some of the changes that have happened in Japan over the past two or three decades.
Before my time in Japan, maybe up to some point in the 80s, alcohol distribution was heavily regulated. I am not sure how the regs worked, but during the regulation period, there were about 7 or 8 hands touching a beer between the time it left the factory and the time it reached the consumer. Each of these hands took a cut. After deregulation, it dropped to about 2 or 3 hands, although the prices didn't really seem to change. If I recall correctly, this delayering was made due to clamoring by "the West" that Japan's market was insulated, overregulated, protected, inefficient, etc. All of these claims were pretty much true.
The rest of the story that largely went untold at the time in western media (even in relatively informed higher brow publications like The Economist), was that this "inefficiency" effectively served as a social welfare net for the country in some obvious and not-so-obvious ways. Specifically:
- Each of those layers of distribution created direct jobs. Some of these jobs were still needed after deregulation but in fewer numbers (e.g., delivery guys, warehouse folks, logistics managers, etc.), but some were not (e.g., most management positions that could be REALLY good for social connections but not actually needed to get the alcohol from one place to another).
- Each of those layers were socially obligated to do some business with companies farther down the chain. A simple example is that a mid-level distribution company would make sure to hold their enkai parties at a restaurant/bar that is a client of a client of theirs. The owner of a typical bottom-level liquor distributorship (I have befriended a few) would visit 1-3 of their clients for a drink and maybe some food each night for 3-5 nights a week. It was an expected part of greasing the wheels of the economy.
The loss of these layers, a often times the loss of the high-touch layer of distribution to discount "wholesalers", meant that the money cycled fewer times in the economy.
Liquor distribution may seem like an obvious example, but this type of delayering has happened throughout the economy, and the backscratching patronage has decreased along with it. Without getting into a discussion of velocity of money, I would say that this has had a pronounced negative impact on the economy because the money just isn't cycling as much. Unfortunately this is sometimes happening by design.
For those economically inclined, I don't want to suggest that the inefficient alcohol distribution system should have stayed in place. Maybe it should have, maybe it shouldn't have -- that actually gets into a tricky discussion about the weak or non-existent welfare programs in Japan and how this leads to an inability to deconstruct and reconstruct some areas of the domestic economy. My main point is that I don't think anyone had a right to be surprised that the domestic economy took a long and big hit when a high-velocity system was replaced with a low-velocity system with no other social or political changes made to pick up the slack.
[+] [-] csa|12 years ago|reply
Twenty years ago, middle class workers went out quite a bit more often and quite a bit more luxuriously than they do now. Some examples:
- The typical end-of-year party (bounenkai) 20 years ago at a some small-sized (20-30 people) organization I knew and/or worked at would cost about $150-$400. These days, it's more like $50-$100.
- After a big party in the 90s, you would frequently go to a second, third, and fourth parties. Now you often only go to one or maybe even to none. Total cost per person for these big parties and after-parties were often in the $500-$1000 range.
- There number of "big" parties used to be much higher 20 years ago than they are now. As a simple example, some places that used to have 3 or 4 a year now only have 1.
- There used to be a lot of parties throughout the year -- maybe a small party for a small win like reaching a milestone in a project, maybe a small and wild off-the-hook party for a promotion (e.g., kachou, buchou, etc.). These are largely gone or toned down significantly.
Note that these are for middle class folks, which is basically all of Japan. Multiply these seemingly small figures by the multitudes of small offices and organizations throughout Japan. This guts the service industry. As I mentioned before, the number of bars, snacks, and small restaurants seems to have fallen precipitously. Those closed shops are a big reduction of unskilled or semi-skilled jobs and a reduced velocity of money.
[Interesting side note: There were no shortage of owners of small/tiny bars who made $X00,000 annual incomes in the 90s. These low-prestige jobs clobbered the typical salaryman wage, but most "smart kids" were not willing to start bars because it was largely stigmatized. For some reason, jobs at "normal" bars were grouped with jobs at "hostess" bars.]
Also note that a lot of times these modest expenditures are not being made due to limited finances -- a lot of these people have really stable jobs and make really good money. Rather, it seems like there is a perceived need to be more frugal. Perhaps this is due to social pressures, perhaps this is due to irrational fears, perhaps it's just more efficient.
[+] [-] csa|12 years ago|reply
[+] [-] kaybe|12 years ago|reply
[+] [-] nerdo|12 years ago|reply
[+] [-] alexeisadeski3|12 years ago|reply
The Economist covered it previously as well.
[+] [-] adventured|12 years ago|reply
[+] [-] cryofan|12 years ago|reply
[deleted]