What’s Income Inequality like in Japan?

9 comments

1. https://japantoday.com/category/features/kuchikomi/magazine-warns-japanese-society-on-verge-of-becoming-an-income-based-caste-system

   From what I hear it’s the classic conundrum of the rich getting richer and the poor staying poor.

   Although I find companies here are generally a lot more stingy with their salaries for normal workers despite being the 3rd largest economy many nations in the region are starting to overtake or match japan. Not to mention the overtime allowance system which introduces 40 hours of unpaid overtime a month (pretty much slave labor)

   But with inflation hitting 4% this year and how the exchange rate has been lately people are starting to feel the impact of stagnant wages.

2. The gap between rich and poor is smaller compared to the US. Rich people in Japan don’t flaunt their wealth as much and executives have lower salaries. The homes of the rich are a bit smaller compared to mansions in the Hollywood Hills, Bel Air, Malibu. The worst neighborhoods are cleaner and safer than in US cities.

3. Japan has pretty bad inequality overall, but has notably:

   * One of the smallest gaps between the top and bottom 20% percentile in the world.

   * Less location based segregation due to very few restrictions on higher density housing.

   * Unusually high socioeconomic mobility between generations, adjusted for the high inequality. It’s still mostly inline with rich Europe though, nothing actually special.

   The US, and especially SF Bay Area, is also an extreme outlier shithole. SF basically has all the bad parts of a cyberpunk dystopia, minus all the good parts.

4. I get the feeling that true wealth is very well hidden and not flaunted.

5. Overall yes, although differences do exist, the society tends to be more egalitarian. As often said, Japan is what a successful communist country looks like.

   Gaps do exist, though, but rich people here don’t brag off. It’s not in their mentality. Money is less important than knowledge or skills (similar to western Europe). As such you will see a big difference in terms of education. Simply put, rich people here tend to speak English, have lived abroad, have high general knowledge and will know your country better than you do, but you won’t be able to spot them by just looking at their clothes.

6. It defiantly exists, you just aren’t going to the massive homes with large yards etc. It’s more camouflaged here.

7. The floor is much higher but the ceiling is much much lower.

   Average salaryman makes like 36k USD a year. Which is pretty dismal for a white collar worker.

   Rent is much more affordable, transit is great. But investing and saving is not so great. Homes are a liability not an investment here.

   Work from home is a dream too. Not going to happen outside of some trendy foreign or young corps.

8. Japan has lower inequality than the US but higher than most European countries, see for example:

   [https://wid.world/](https://wid.world/)%5Bhttps://data.oecd.org/inequality/income-inequality.htm%5D(https://data.oecd.org/inequality/income-inequality.htm)%5Bhttps://www.jcer.or.jp/english/how-does-inequality-in-japan-compare-with-others%5D(https://www.jcer.or.jp/english/how-does-inequality-in-japan-compare-with-others)

   The US and especially the Bay Area is a pretty bad basis for comparison since almost all developed countries on Earth have lower income inequality than the US, and the Bay Area is famous for very visible inequality. On the contrary, inequality in Japan is not only lower, it’s much less visible, eg. homeless people are banoshed from the streets and parks, wealth is not flaunted, etc.

   However, if you leave the popular urban areas, inequality and poverty is very visible. Southern Osaka, southern Yokohama or even northern Tokyo has quite a few run-down areas. Not to mention rural decline and the rust belts. Driving around Japan is quite eye-opening. Comparing the Japanese inaka with Western Europe is really striking.

   Also, a few decades of stagnant wages, no growth, and financial liberalization has really increased wealth disparities, so the old adage about Japan (or other Asian societies) being egalitarian does not hold at all in 2022.

9. There will never be income equality as long as we need brain surgeons and people to serve your Big Mac. Why would there be?