JJapan

After a decade of “Abenomics”, Japan is trapped in a vicious cycle of low prices and stagnant salaries. How can Japan make up for three lost decades?

After a decade of “Abenomics”, Japan is trapped in a vicious cycle of low prices and stagnant salaries. How can Japan make up for three lost decades?

https://english.cw.com.tw/article/article.action?id=3264&utm_source=forum_reddit&utm_medium=social&utm_campaign=forum_reddit

28 comments

  1. Let spendy tourists back in, in conjunction with legalising cannabis.. Amsterdam in the East wooo

  2. Japan could inflation run rampant like the US Fed did.

    It’s not great, I keep hearing people say something like “I can’t afford this” in the supermarket. 10/10 would not recommend. Keep the low prices because wages do not rise fast enough for people not to struggle to afford food.

  3. I like the low prices. Japan functions as japan does. I love that there are still little family run tofu-yas, or bakeries, Kissatens etc., there is a great entrepreneurial spirit in japan, that persists and resists any complete corporate takeover of the marketplace as it has in North America. Obsession to perpetual growth is destroying the planet.

  4. They have a lot of systemic problems, especially with education.

    I see this in people I work with. The really talented people go to work with foreign firms that pay really well. Domestic firms get the remainder and are mired in beaurocracy and dated ways of thinking…

    I don’t think they can make up for it. I think wages for actual Japanese will stay generally high because they have their shit together in a few specific areas of the economy and know how to exploit foreign workers.

  5. Was this article written a year ago? Prices are going up, and it will likely continue going up for several months.

  6. This whole article is muddled, and seems to ascribe very deep structural issues that have existed for decades to one policy. Love or hate abenomics it was nowhere near big enough to cause these issues.

  7. A decade? The BOJ has maintained the same stance since the bubble burst in the late 1980s. They were the inventors of zero interest rate policy to save insolvent banks, long before the rest of the world followed suit. Nice attempt to blame Abe.

  8. Things are going to get much worse before they get better.

    It’s no surprise Kishida has called to reactivate the nuclear plants, his advisors have shown him the forecasts for the oil and gas crisis in the coming 24 months – Japan imports 85%+ of its energy needs.

    The global food crisis will worsen towards the end of this year, as the increased fertilizer and fuel costs are passed on by the farmers/hauliers to the consumer – Japan imports 60% of its food.

    And to compound both of these issues, last week the Yen fell to the 139 level against the dollar, the lowest in 24 years.

    Ironically the one area that could boost the economy right now is tourism….yet the borders are still shut.

    The problem with stagnant salaries is the individuals responsible for signing off on those measures within corporations(board members) are generally on the verge of retirement. At that stage, their only goal is to increase/maintain profit for shareholders, as that alone will determine their retirement bonus and *legacy* among peers at the golf course. Likewise for politicians, their allegiances are to corporations not citizens, so they are also not incentived to introduce policies that would negatively affect their corporate donors. Conflicts of interest you might say, and the only losers are the 90% of the population struggling to makes ends meat.

  9. The media must find it so frustrating that they’ve been calling the collapse of Japan for decades yet life there continues on just fine.

  11. I mean Japan has a huge advantage over every other developed nation in that their housing prices are more normal than USA, Canada, China, South Korea and Singapore. I’d take a lower wage and medium prices but an affordable house. Rather than high wages and totally crazy housing prices in the the US. I mean even if you are making $150,000 as a household in the US in almost every urban center that still means you can’t buy the multi million dollar single family homes or condos. That just isn’t the situation in Japan.

  12. I dont mind low prices. Prefer that to whatever bullshit 100% price hikes we are getring here in the West with no tangible wage increases

  16. I hope they can reduce the capital gain tax of the middle class and poor people. Government should encourage citizens to take a piece of cake from the companies.

  17. This issue is very, very complicated. If I were to boil it down to one factor it would be the international mobility of money and that the nationalistic view of the world is simply no longer applicable.

    Bear with me here. In the past companies had a clear “home” where they were made things and were taxed. Now we have a world where components are made for cheap in half a dozen countries, they’re assembled in another country, and exported around the world where they’re sold for huge sums. And the money doesn’t come “home”. It goes into the murky space between countries in tax-havens with just enough money being sent home to keep the main branch’s lights on and fund R&D.

    Let’s take an example, a car. Engineers in Japan design it. They design stuff that, in theory at least, has huge value, but those designs are “sold” to the international branch of the company for pennies since they’re just “ideas” and have no set value. The value curiously almost always is a pretty close match for the company’s expenses, meaning that they make almost no “profit” and so pay little or no tax.

    The actual manufacturing is done by a branch in Thailand, China, or a hundred other places. Those subsidiaries “pay” the international branch (housed in some tax haven) for the use of the intellectual property since they’re technically registered as separate legal entities in different countries. So the local companies technically operate at barely a profit, minimising the company’s tax burden because of these payments for “intellectual property” from the international branch of the company.

    The final goods are then sold, more and more often locally to avoid paying taxes based on the commercial value of the car. Now sure at this point the company does pay some tax, but actually the consumer pays most of it in sales taxes. Now the retailer pays not the local factory that they got the car from, but the international branch, which is sitting in a tax haven and pays nothing.

    So we have this car. A valuable product. Except on paper the R&D behind the car was done at no profit. Likewise on paper the manufacturing was done at no profit. All the profit is attributed to the international branch sitting in a tax haven. And that money never goes anywhere near Japan, because then it would attract tax.

    … and people wonder why, despite Japan being home to huge high-tech multinational companies the GDP is so low? Because on paper nothing of value is being developed, made, or sold in Japan.

    They wonder why the yen is so low? Because companies aren’t national anymore. They’re international. Sitting in the grey spaces and tax havens where they can maximise their profits and avoid as much tax as possible.

    And this isn’t just a problem in Japan. We’re seeing this internationally – and that’s they key. This is an international problem. Japan just happens to be suffering worse from it right now because the yen isn’t the preferred currency for those international companies to bank their money in right now.

    But again, this comment is just one tiny part of a much bigger picture. It’s a complex problem that boils down to companies being international while governments are national – and yes, they could enact laws to stop this, but the first country that did it would be bankrupted by the major corporations as a clear signal “we won’t tolerate this”. What is needed is international cooperation. But we all know that won’t happen, just like global warming is seeing no concrete action – because international companies are led by short-sighted idiots intent on making as much money as possible in the short-term, and to hell with the consequences.

  19. Most western economies have had this idea of ‘infinite expansion will pay tomorrow the cost of today’s output’. Take out a loan to produce, and pay off the loan after the product is sold. This worked great for things like pensions and the like until people started living another 20 years more and they actually started to draw upon those pensions.

    Japan had the double whammy of these pensioners living longer than anyone else in the world, along with a shrinking population meaning fewer people to pay into a system that was intended for continuous growth to support itself. shrinking populations are a horrendous burden on societies that survive on debt being paid off on the next generation, as the generational weight becomes so great that there is just no way to pay off what our forefathers saddled us with. Japan is there now, and I imagine the US will be in the same spot in this coming generation.

  21. low prices and stagnant salaries? gotta try out that crippling high prices and stagnant salaries? honestly though, this seems like japan did an amazing thing here, inflation has savagely outpaced wages so, bravo. i hope you guys can hold onto your system

  22. At least housing hasn’t gone insane? There is a new housing development going in next to my in laws place. The new homes range from $510k-$580k which is at least in the realm of possibility from this Americans point of view.

  23. I’m Japanese
    I think that Japan is widening rich-poor gaps…
    I don’t know other country,but there is a dark mood in Japan as a whole.

  24. Who has problems with low prices? Are we mad about low prices? I kinda need those.

  25. BOJ double down on QE while other central banks raise the interest rate,which is believed to drop the value of yen.

    I suspect that BOJ still has to continue QE because Japan’s economy is much worse than mainstream media portraited.
    And many economists including Richard Koo pointed out QE is actually unsuccessful because it only increased monetary base not money stock.

    I’d say gov needs acknowledge that QE or trick down didn’t work.Consumers should be funded directly like UBI.Free education is great too.

    The bottom of barrel must be improved.

    Edit:Seems some don’t agree with my take.
    I’ll put the statement of BOJ why they still continue QE.

    https://www.google.com/url?sa=t&source=web&rct=j&url=https://www.boj.or.jp/en/announcements/release_2022/k220617a.pdf&ved=2ahUKEwiG_9ydsoX5AhURQfUHHUNXAN0QFnoECAcQAQ&usg=AOvVaw3ZvmgtflIW2qduD7I_OAd2

  26. No need to even read the article when it cites wrong facts.

    Plus ‘stagnant’ means ‘stable’ while all the crime, homelessness, unemployment rates were decreasing each year, which is the reason why people don’t complain about the Abenomics here.

  27. I am uninformed. I have a question. Does Japan need collective bargaining from unions to bring wages up? Is there a future for Japan where laborers get paid more my collective bargaining, thus bringing quality-of-life up?

    Is there an issue in Japan with lobbyists paying politicians for laws that only benefit the super wealthy, like here in Canada?

Leave a Reply
— Previous article

Is there any benefit to making sentence flashcards?
Next article —

Tokyo sky tree in the clouds

You May Also Like