This time is a little different from usual. The Economist had a special report on Japan, and much of the content seems like material to which you would react. So I'm going to use a number of quotes from the magazine's November 20-26 issue as springboards for discussion. Ready - set - go!
Let me start off by saying -- HOLY CRAP! Okay, let's do this.
"One of the unfortunate side-effects of ageing in Japan is that it will be the young who suffer the most. Although unemployment levels may remain among the lowest in the rich world, many of the jobs will be lowly ones. The children of the baby-boomers are currently entering their 40s, which creates a secondary bulge at the middle-manager level of Japanese business. Because of a seniority-based pay system, this puts a huge strain on business costs, leaving less money to provide young people with training and good jobs.
It is sometimes said that Japan's risk appetite mirrors that of its baby-boomers. In the prime of their working lives they wanted to conquer the world with their products. Now, in their 60s, they want a quieter life. The same seems to go for the country as a whole."
I saw an article on this very subject about three weeks back on CNNj. In particular, it followed the lives of twin sisters who, after graduating from the same university with the same business major, took different paths. One sister left the country, moved to Beijing, and in three days had found a good position with a trade company. The other sister stayed in Japan to look for work, and is now stuck in apparently permanent freeter-dom.
To make things worse, that middle-management bulge you mentioned may spell the end of the salaryman paradigm in Japanese business. More companies are considering downsizing or outsourcing as a way to cut costs and still be able to pay the employees who, because of contracts drafted back in the Bubble period, can still demand salaryman-level paychecks and benefits. And in the end, the younger employees feel like they're getting shafted, because they are.
"Given the political quagmire, economic policy in the next few years is likely to remain a matter of muddling through. Conceivably Mr. Kan's government may not last its term, which runs until 2013. Even so, the looming demographic challenges present an opportunity that Mr. Kan should seize. The day he took office, he likened his cabinet to a ragtag militia that helped overthrow the Tokugawa shogunate at the start of the Meiji era in the late 19th century. If he can persuade Japanese voters that dramatic change is needed to secure not only their future but their children's and grandchildren's as well, last year's election may start to look like another turning point in Japanese history."
I like that second sentence there. "Conceivably..." There hasn't been a single government in the last 6 years to last out its full term in the Japanese parliamentary system. Mr. Kan is going to have to do something dramatic to get the turnaround he needs, and even so he might have to do something even more unthinkable for a Japanese politician -- refuse to stand down when things start looking a little bad. It seems like every time a problem crops up, the PM is always the first to take the fall for it.
"Japanese managers say they are already feeling the strain from a shrinking consumer base. Convenience and department stores have merged to achieve greater economies of scale. Last year two large drinks companies, Kirin and Suntory, tried to join forces to offset declines in their home markets, though the merger talks collapsed over ownership disputes.
GE Japan's boss, Yoshiaki Fujimori, notes with exasperation that his company has not grown in the past five years, largely because of ageing. Elderly people go to bed early, so they use less electricity. That affects GE's utility business. They travel less, which hits its airline business. Even its health-care business is slow, he says, because the elderly are not keen to adopt new information technology."
Population aging. Birthrate strongly declining. Immigration still not encouraged. Companies overextended during the boom years, and overextended even more in the "We're not in recession" denial years. Of course the consumer base is shrinking. Some of it wasn't actually there in the first place. Next.
"If you travel by public transport, Japan can seem like one of the most networked countries on Earth. When they are not asleep on your shoulder, many of the under-50s are feverishly thumbing their mobile phones. You would think they had a huge circle of friends, but Yugi Genda, a labour economist at the University of Tokyo, says that many just keep on texting the same few close friends and family. Maintaining such strong bonds with a few people is very different from the Western way of keeping up with lots of 'Facebook friends', few of them close."
Oh so true. My girlfriend just cannot believe that I can keep in touch with a dozen or more friends in a dozen different countries and states. She, on the other hand, only has three or four friends who she occasionally texts (not a big tech person, is she). I think another cultural aspect is the Japanese aversion to "getting involved" with other people's affairs, even if your very presence makes you involved in it. No, the Japanese are not normally a gregarious bunch.
"The passing of the 1986 equal-employment-opportunity legislation removed most legal barriers to women in the workplace, but discrimination remains rampant. An executive at one of Japan's leading trading behemoths explained that the women who applied in this year's managerial hiring round were far more able than the men, yet only 20% of them were offered jobs because women were not considered well suited for the industrial employment the firm offered.
such attitudes go all the way up to the boardroom. Only a tiny fraction of the country's high-flying managers are women. One of them, Sakie Fukushima, of Korn/Ferry International, an executive-search firm, says there are only 16 senior female executives working in Japan's top 100 companies. The glass ceiling in Japan is known as the bamboo ceiling, and is even harder to break.
There is a similar bias against older workers staying on after the official retirement age. Japan has very high rates of employment among people aged 60-64 compared even with America. It generally did not encourage workers to retire before 60, as happened in continental Europe. but after 65 employment drops off sharply."
I'll be a little blunter than this guy. Many Japanese companies still actively discriminate against women for higher-level positions because it is assumed that they will get married and have children, thus having to leave the company. It's considered a waste of time and resources to train someone for an important position if they're just going to leave in a few years. I know that in the Dept. of Education, the vast majority of female teachers are middle-aged, single, and childless -- because their job leaves no time and no expectation of it being otherwise.
In the past few years, however, there's been a rise in the number of TV programs focusing on the arafou (Around Forty) women's demographic, especially cases where women went back to work after their children started college, only to succeed amazingly.
As for the over-65's, I can only give examples. Like my girlfriend's father, who hit the retirement age two or three years back. It took three attempts before they could finally get him to accept retirement. Men who have grown up, lived, and worked under the salaryman model of life simply have no idea what to do with themselves after they retire -- and so often they refuse to. Their wives, who have spent decades running the household almost single-handedly, have no idea what to do with their husbands either, and often just kick them out of the house during the day and leave them at loose ends.
Officially, employment may drop off sharply after 65, but I bet that doesn't count all the little makework jobs that supposedly retired guys will find to pass the time. I knew one elderly gentleman who quite enjoyed his new job of scaring birds off the airport runway. It was better than going home and being with his wife all day long, apparently.
"The number of foreigners living legally in Japan has more than doubled in 20 years, but only from 1m to just over 2 m. Most of these are Chinese and Korean, and they are not always made welcome. Moreover, these countries' own populations are ageing, so they may not be in the business of exporting people for much longer.
The number of foreigners who have completed their studies in Japan is pitifully low compared with other advanced economies: 0.7% of the total, compared with 29% in Australia, 16% in Britain and 13% in America, according to the Ministry of Economy, Trade and Industry (METI). Clearly the universities are not providing a breeding ground for bright foreign graduates who choose to stay."
"Not always made welcome" is about synonymous with "actively discriminated against" in some parts of this country. It's not as bad as it used to be, for sure, but it happens. It can be even worse for ethnic Korean Japanese citizens or the descendants of the Japanese untouchables, though. When you get down to it, there's not much economic incentive for foreigners to stay in this country in the long-term. Heck, there's not much incentive for locals to stay in the country, in some cases.
"Two decades of post-bubble economist stagnation, together with an ageing population, have led to what the Japanese call the waniguchi (crocodile's mouth) effect: total public expenditure has soared whereas tax revenues have dropped. The fastest-rising expenditure item in the budget is social security (covering pensions, medical insurance, welfare and employment programmes), which has risen from 11.5 trillion yen in 1990 to a forecast 27.2 trillion yen this year. Some 70% of all social-security payments now go to those over 65.
Japan's social-security benefits are still less generous than those of many European countries, but the scope to increase them is limited by the size of the national debt. Already pension payments are absorbing a growing share of the total social-security bill. In 2006 they accounted for 13% of national income, almost double the level of 1990, and their share is due to rise further."
Welcome to umbrella-shaped population models for economics. The aforementioned salaryman benefits are pretty exorbitant, and they never stop. And the life-expectancy keeps rising.
"Walk into the inn in the Hokkaido village of Akanko, and everything from the welcoming cry of 'irasshaimase' to the taciturn old man grilling chicken on the fire seems quintessentially Japanese. Until, that is, you hear all the customers speaking Mandarin. The Chinese have flocked to this area since it provided some of the settings for a 2008 Chinese blockbuster comedy, 'If You Are the One'.
The local Japanese were shocked when the early arrivals used the onsen, or spas, to do the unthinkable: they washed their dirty clothes in the hot tubs. There is till some tut-tutting about Chinese customs - the elbows on the table, the lack of familiarity with flushing loos - but if it were not for these visitors, the tourist trade in the area would be half-dead. Before the Chinese fly out of Sapporo, Hokkaido's capital, they splurge on items like medicines and rice cookers. Tourism officials call it the 'Hokkaido boom'.
Japan is a country with immaculate service, good food, beautiful countryside and excellent beaches. As the domestic population shrinks and regional economies suffer, it makes sense to encourage increasingly affluent visitors from other other parts of Asia. The Japan Tourism Agency (JTA) has at last understood this. It has set a goal of attracting 10m tourists this year, a big leap from last year's figure of 6.8m. To make this possible it has relaxed its stringent visa requirements, which used to allow in only the wealthiest Chinese. Figures up to September showed a 56% rise in tourist arrivals from China, a degree of success that has caught the Japanese off-guard."
And indigent racism gives way to capitalist necessity. We're seeing some of this in Kumamoto as well. Kyushu in general has always been a good vacation spot for Korea, since it's practically next door (three hours by ferry, 45 minutes by plane to Fukuoka City). I can't remember hearing of any incidents as outrageous as laundry in the hot springs, but I myself have been at the center of various embarrassing social faux pas from time to time.
"Since the mid-1970s, when it became clear that the number of births was resolutely declining, Japanese governments have made efforts to encourage people to have more babies. But for all that they have increased child benefits and provided daycare centers in the past 30 years, the birth rate has remained stubbornly low. One reason is that in Japan, unlike in the West, marriage is still more or less a prerequisite for having children. Only 2% of births take place out of wedlock. And weddings cost a lot of money. The more elaborate sort may involve renting a chocolate-box 'church' and hiring or buying at least three bridal outfits. The average cost of a Japanese wedding is about 3.2m yen ($40,000)."
I happened to attend a wedding last October. The bride did in fact wear three different dresses (kimono, wedding gown, party dress) to the event. She hardly had time to eat any of the wonderful (and expensive) meal that was served. Traditionally, guests are expected to donate about $200 each upon arrival, to help the couple pay for the damn thing, which is considered a matter of course by the Japanese and very annoying by foreigners.
Many young people simply decide not to get married, and not just because of the cost. Young women in particular don't seem to really see any benefit in repeating their mothers' lifestyle, especially with the "bamboo ceiling."
"It does not help that unemployment is high and incomes are low among the young - especially among young men, who increasingly give up even looking for jobs. One of Japan's most prominent sociologists, Masahiro Yamada of Chuo University, thinks that most young Japanese women still want to be housewives, but are struggling to find a breadwinner who earns enough to support them. He points out that half of the young people of prime marrying age - 20-34 - still live with their parents. In the 1990s he coined the term 'parasite singles' to describe them. They seemed to be getting a good deal, saving money on rent and spending it on foreign travel and luxury goods instead. If they wanted privacy, they could always go to one of Japan's ubiquitous love hotels.
Since then the 'parasites' have got older, and a lot of them are living with their parents not because they want to but because they cannot afford to live independently. They are moving towards middle age but have remained single, working for low pay or unemployed. Some have even become what Mr Yamada calls 'pension parasites', living on their parents' pensions.
Part of the problem may be that young men, who during Japan's free-wheeling boom era rarely saw their workaholic fathers, do not want to fall into the same trap. Some of them have become 'grass-eating men' who prefer clothes and cosmetics to cars and avoid life in the fast lane. Others resort to hikikomori, locking themselves in their bedrooms and refusing to talk to anyone, even the parents who deliver food to them. Many of them have watched their mothers divorce their fathers on retirement. Those men are cruelly known as 'dead wet leaves', whose wives have trouble sweeping them out of the home. The Japanese are also learning from personal experience that looking after elderly parents can be more costly and time-consuming than looking after children. That may be another factor in their calculations."
I think my last three or four replies have all touched on this. I'll add to it: One more reason why so many young people never move out is because it's so hard to even get a decent apartment in this country. Not because they don't exist, but because the potential renter is expected to put up at least three months' rent in advance, and then pay the equivalent of three-to-six months' rent to the landlord as key-money (personal gift / bribe), and then only if they have a guarantor, who can be either a male relative of good economic standing or a representative from a guarantor agency (which will also cost the equivalent of a couple months' rent). In short, a small $500-a-month apartment can cost as much as $5000 just to have the chance of renting, and that's too big a strain on young people who are stuck in freeter-dom for lack of any other option. Normally, young people would rely on their company for housing, at least for the first few years. I know that NTT, the biggest communications and infrastructure company in Japan, owns apartment buildings in all the major cities just to house its employees. But as mentioned before, companies aren't hiring like they used to.
"In the Hokkaido town of Yubari, the general hospital was one of the earliest casualties of the municipality's bankruptcy. The building was so big that the heating bill alone ate up a lot of the budget, and the growing number of elderly patients put it under increasing strain. So in 2006 Tomohiko Murakami, a pioneering Hokkaido doctor, decided to turn it into a blueprint for health-care reform. His blunt message was that the money had run out, so attitudes had to change.
He closed down two-third of the hospital, cut the number of ambulances in half and told his elderly patients they should walk to hospital because it was good for them. They grumbled, but it caused no obvious deterioration in their health, he says. They had to use their own initiative rather than relying on the government to look after them. It was the same when half-empty schools merged. What he calls the 'Yubari model' may hold a lesson for the country. 'It may take bankruptcy to change attitudes in Japan, but that would be a good thing,' he says."
I think I've said this to my girlfriend before, but the only way the older bureaucrats know how to change is through disaster. Sadly, she agrees.
That ought to be plenty of fuel for content.