Here
and
Now

kuchikomi

Economist draws picture of Japan's stealthy wealthy

15 Comments

The 2018 "World Wealth Report" was recently issued by Paris-based Capgemini Consulting. Writing in Shukan Jitsuwa (Aug 2), economic journalist Takuro Morinaga examines its details regarding the holdings and investments of the economically affluent, who are referred to as HNWI (high net worth individuals). Such people are defined as having a minimum of U.S. $1 million with which to invest. (That figure would be exclusive of their personal residence or items of consumption.)

In the coin of the realm, $1 million is roughly 110,000,000 Japanese yen. In the previous year's report from Capgemini, it was estimated that 18.10 million people in the world qualified as HNWI. The 2017 figure marked an increase of 9.5% over 2016. 

The total assets of these individuals came to $70 trillion, or 7,700 trillion Japanese yen -- a figure equivalent to 14 times Japan's annual GDP.

Broken down by country, the United States boasted the greatest number of HNWI, without around 5,285,000 people. Second was Japan, with 3,162,000 people. Their numbers were up from the previous year's report by 9.4%.

As for the estimated total worth of these moneyed Japanese, the figure comes to 847 trillion yen, or an average of 268,000,000 yen per person.

Thus it's easy to see from the trends that Japan's rich are rapidly getting richer, having surged past the three-million mark.

It's notable that while Japan's gross domestic product accounts for about 6% of world GDP, the number of HNWI individuals in Japan, as a percentage of the world's total, comes to around 17% -- making Japan one of the top homes for multimillionaires.

Contrast this, if you will, with the average lifetime earnings of the ordinary Japanese wage-earner, which is estimated at around 200 million yen. How does one explain such a large divergence from the moneyed 9.5% who belong to the ranks of the HNWI?

Okay, writes Morinaga: I'll give you a hint. It's all about income distribution. In the five years since the beginning of the government under Prime Minister Shinzo Abe, the actual GDP grew by 7%. But during the same period, actual wages declined by 4%. In other words, the results of Japan's economic growth have flowed only into the hands of the most wealthy citizens -- or to put it another way, the wealthy have achieved their gains at the expense of their less fortunate compatriots.

Now normally when such a phenomenon occurs the rank-and-file citizens would be infuriated. In the U.S., for example, it can explain the popularity of left-wing politicians, such as failed 2016 presidential candidate Bernie Sanders, who was openly critical of the wealthy.

A similar situation can be seen in the UK, with the Labour Party headed Jeremy Corbyn and socialist republican Jean-Luc Mélenchon in France. In Japan, however, leftist parties have continued to decline in influence, to the point that they are currently facing extinction.

How does one explain such a development? For one thing, Japan's wealthy tend to avoid flaunting their wealth. Of the nation's 53.4 million households, about one in 17 is HNWI. That means there is almost certainly someone like that living in proximity to you, the reader. But are you able to distinguish them from those belonging to the upper middle class?

Japan's affluent are holding in their collective breaths, and by being almost completely unobserved, are continuing to rack up gains at the expense of the hoi polloi. Morinaga -- a man of populist bent who obviously doesn't approve of this situation -- doesn't pull any punches. He describes them unkindly as "blood-sucking leeches hiding in the grass."

© Japan Today

©2018 GPlusMedia Inc.

15 Comments
Login to comment

There are ways to make money in Japan and the wealthy know where and what to invest in.

Any bank in Japan won’t give you a decent return but the wealthy know how to generate fixed income and know how to double, treble or quadruple an investment in a year.

I recently returned 20% to a Japanese investor within three months.

For those wanting to know the answer to what that is?

Well, one piece of advice!

Follow the trends....

-9 ( +1 / -10 )

 "...the actual GDP grew by 7%. But during the same period, actual wages declined by 4%."

Thanks to globalization and market "reforms." Time to raise and broaden the corporate income tax and toughen labor laws in ways that favor the majority instead of the elite.

Having 2% unemployment with falling wages is a clear indication that the neo-lib inspired policy framework is distorting the basic supply and demand dynamics. History shows us that such socio-economic distortions end very badly. Think blindfolds, brick walls and firing squads.

-2 ( +4 / -6 )

If these people haven't broken any laws, it's unfair to call them leeches. And besides, the government will get its money in the end because of japan's predatory inheritance taxes. There's no taking it with you. Or passing it along to your heirs.

8 ( +10 / -2 )

So what's new? This is happening all over the world. Not just Japan.

2 ( +3 / -1 )

 In the five years since the beginning of the government under Prime Minister Shinzo Abe, the actual GDP grew by 7%. But during the same period, actual wages declined by 4%.

Both claims look bogus. I was unable to find any standard statistical source that supports either claim. Real wages have risen slightly during the Abe years (2013-2018). That has been reported in numerous articles including some in Japan Today. Japan just ended nine quarters of consecutive growth but the overall rate was very modest. Looking at the figures for 2013 to 2018 there is nothing that would support a claim of a 7% GDP growth rate in real terms.

Shukan jitsuwa is hardly a go to source for serious economic analysis.

https://wjn.jp/

It is essentially a weekly version of British daily tabloids such as The Sun and The Mirror with lots of pictures of young women with large chests not fully contained by their tops.

-2 ( +3 / -5 )

Shukan jitsuwa is hardly a go to source for serious economic analysis. 

Skepticism is okay, but aren't you shooting the messenger? Morinaga is well known in media circles, including television. He's also been widely quoted by the foreign media, so that makes him a legitimate source. He's analyzing data from the report by Capgemini, which one must assume does not include pictures of busty females.

5 ( +5 / -0 )

The screwing over of the middle class in Japan started under Koizumi and has been LDP policy now for many years. Real income for the middle class has been shrinking over that period of time. And the primary measure of income inequality, the GINI coefficient, clearly shows that the rich are getting much richer in Japan while the rest of the county residents are losing out. Easy to find this data and it is fact. Also Japan's poverty rates in the last 20 years have increased dramatically as well. This is also fact and easily resourced. About 17% of Japanese families live in poverty now, up dramatically over the last decades.

So sure, most people in Japan are getting screwed over by their government. Will things change, well Abe has 76% Diet member support now to continue as PM. Take a wild guess on that one. Japan, like many other countries around the world, is becoming a banana republic. Trump and Abe both are moving their countries down the same path.

3 ( +4 / -1 )

Just $1 million makes you a HNWI?

Given that the world's richest man is now worth over $100 billion, I think they need to redefine the term.

-4 ( +0 / -4 )

Broken down by country, the United States boasted the greatest number of HNWI, without around 5,285,000 people. Second was Japan, with 3,162,000 people.

That would suggest to me that wealth disparity in Japan is even worse than in the US.

6 ( +6 / -0 )

Just $1 million makes you a HNWI?

It said in the first paragraph: "Such people are defined as having a minimum of U.S. $1 million with which to invest. (That figure would be exclusive of their personal residence or items of consumption.)" So it's not their personal worth but the money they have to invest. And that's a minimum figure.

0 ( +0 / -0 )

 Looking at the figures for 2013 to 2018 there is nothing that would support a claim of a 7% GDP growth rate in real terms.

I assume they meant a cumulative increase of 7%, which would work out to just over 1% per year over the period, which I think is about right.

0 ( +0 / -0 )

Taking from the middle class and poor and giving to the rich is Abenomics.

5 ( +5 / -0 )

I feel that these economists and statistics are trying to bully Japan and Abe government. Japan is mostly a middle class society. In fact there are very few poor compared to other OECD nations. There are more homeless in SAN Francisco than ALL of Japan! If you work hard, you too can become a high net worth individual, so let’s all aim to be rich rather than believing negative stories.

-6 ( +0 / -6 )

Of the nation's 53.4 million households, about one in 17 is HNWI.

That is very unlikely because some of the 3 million HNWI are married to each other or share a household as parent and child. The country is full of family firms, and in inaka, most company shachos are shacho's son.

In 2015, Nomura said the number of high income households was around 1.2 million. Tack on a rise for the wealthiest just below them and you get a more realistic one in thirty households is a millionaire. This may be in the form of a piece of land handed down, and is not necessarily cash savings and paper investments.

https://www.nri.com/global/news/2016/161128_1.aspx

2 ( +2 / -0 )

Japan is mostly a middle class society. In fact there are very few poor compared to other OECD nations. There are more homeless in SAN Francisco than ALL of Japan! If you work hard, you too can become a high net worth individual, so let’s all aim to be rich rather than believing negative stories.

Sorry, your statements are factually untrue. Japan has nearly as many people living in poverty as a percent as the USA, 17% for Japan and 19% for the USA. And working hard does not mean you become rich. Poor people work as hard or harder than the rich, some have multiple jobs for example. Trump is rich because his father was rich, that is just the luck of the draw. Last financial mobility in the USA and Japan is decreasing, not increasing. Most kids today in the USA and Japan will make less then their parents. Facts. Look them up. Last, Japan use to be a middle class society, it is not now nor has been for decades. Academics have been writing about this since the 1980s, the 90% middle class thing in Japan is a myth today.

4 ( +4 / -0 )

Login to leave a comment

Facebook users

Use your Facebook account to login or register with JapanToday. By doing so, you will also receive an email inviting you to receive our news alerts.

Facebook Connect

Login with your JapanToday account

User registration

Articles, Offers & Useful Resources

A mix of what's trending on our other sites