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Middle-class life today is a struggle with poverty

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A generation ago, an astonishing 90 percent of Japanese were proud to call themselves “middle class” – meaning what? “Car, color TV, air conditioner” – the “3 Cs” – either acquired or within reach. A middle class “middle income” was, in today’s terms, 5.5 million yen a year. Home ownership was either a fact or a reasonable aspiration. Life was good and getting better. Things were looking up.

They went down instead. The middle income today, government figures show, is 4.37 million – “middle income” as distinct from “average income.” The latter hasn’t changed much, as the few richest grow richer still and buoy up the average sufficiently to cover the shrinking earnings prevailing among the less favored many. What, asks Spa (March 22-29), is “middle-class life” today? A struggle with poverty, is the answer.

Various contributing factors converge. Economic growth collapsed with the bubble economy in the 1990s. Twenty years of stagnation were followed by haltering, sputtering recovery that has yet to catch fire – inevitably, perhaps, given the aging and declining population. Meanwhile, energy, natural resources and food prices are rising worldwide – a trend begun before COVID-19 and accelerating since, gaining speed with Russia’s invasion of Ukraine.   

Consumption tax was 3 percent in 1990; it’s 10 percent now. Interest rates in the 1990s were, at lowest 1, percent, allowing savings to grow, however modestly. Today’s interest rates are in “minus” territory.

Then there are the phone bills, the ever-rising phone bills as smartphone use engulfs us. In round figures: 110,000 yen a year for communication 20 years ago; 160,000 now.

Let’s follow Spa as it charts the fate of the middle class dream, focusing on three sectors: housing, transportation and education.

Ideally, economists generally say, housing for a middle-income family (4.37 million yen a year) would cost 75,000 yen monthly. A family of three, to be at all comfortable, would need “2LDK” – two bedrooms plus living room, dining room and kitchen. Within Tokyo’s 23 wards? Impossible, the magazine says bluntly. The very cheapest housing available, in Katsushika Ward, would cost 96,000 a month. More typical is Minato Ward (245,000) or Shibuya (221,000).

The more or less remote suburbs are friendlier: Hachioji (79,000 yen), Musashimurayama (75,000), Akiruno (67,000), but have disadvantages of their own, of which more in a moment. If you’re thinking of home ownership, it’s grimmer still. Here too, factors beyond the consumer’s control rule: rising property prices locally, soaring wood prices globally. Keeping within current middle class budgets would mean a 2LDK condominium worth 25 million yen. Going prices in Tokyo range from 60 million to 77 million. Even outside the city center – the nationwide average is 42 million.

If economic constraints drive you to the suburbs, you need a car. Ideally, transport costs for a family of three would be within 45,000 a month. That means a car priced at roughly 1.5 million yen – as are, in fact, the least expensive new cars on the market. All right, you say to yourself, that’ll do – but of course the cost of the car is only the beginning. There’s insurance, maintenance, parking (10,000 yen a month), fuel (now 117 yen a liter and soaring). Well, cutting other spending to the bone you can just about do it – but you can’t go far. It’s understood: necessary travel only.

Education. Kids have to be educated – and well educated, if they’re to rise economically above the current middle class rut. A middle class middle income would allow an education budget of 36,000 yen a month per child for 15 years through senior high school. Can the cheaper public school system properly equip a child for the world of tomorrow? Growing doubts are driving a movement to private schools. They’re three times more expensive: by Spa’s calculations, 17.7 million yen over 15 years versus 5.42 million. Either way, supplementary costs are multiplying: juku, extra-curricular lessons in this and that, and most recently as tele-schooling spreads under the impact of the virus – families inadequately equipped must see their children fall behind and ultimately victim to an “education gap” that will help keep the poor poor and the downward-spiral ling middle class in seemingly irresistible decline. 

Then, of course, there is university. And where’s the money for that to come from?

© Japan Today

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25 Comments
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The latter hasn’t changed much, as the few richest grow richer still and buoy up the average sufficiently to cover the shrinking earnings prevailing among the less favored many

Japan is hardly unique there. Yet the article then proceeds to list the reasons for this as basically rising costs of natural resources?

So that is why educational costs are rising but the staff are still overworked with stagnant pay?

The disconnect is glaring since since it was stated by Spa in the second paragraph.

Work/labor does not pay. Workers have been dissociated from the fruits of their labor. As Warren Buffett stated, if you are not making money while sleeping you will have to work and remain poor until you die.

It is a rentier capital economy and only those with significant capital investments are increasing in wealth.

14 ( +17 / -3 )

Education. Kids have to be educated – and well educated, if they’re to rise economically above the current middle class rut. 

This misinterpretation of this concept is exactly what keeps many in the middle class rut. The education being offered by almost all schools is expensive and pointlessly out of touch with the real world. University education is the biggest waste of money - unless one is studying for a specific and well-paid profession such as medicine. Before that, schools work to teach obedience and suppress creativity and joy - producing automatons who are only good for salaried middle-class rut employment.

There are 2 ways out. Self-education, basic business and financial education, and the ability to think and react creatively to changes. None of these are taught in school.

The other way is, of course, politics. As government grows larger, squashing small and medium sized businesses and suffocating the economy, politics is a path to power and money. This is already recognized by the worst sorts of people, unfortunately.

So far as gas prices being 117 per litre - I can only wish that was so.

15 ( +15 / -0 )

Various contributing factors converge. Economic growth collapsed with the bubble economy in the 1990s.

All triggered by the 1985 Plaza Accord, the US-led plan to strengthen the yen and weaken the Japanese economy, which it has done in spectacular style. The US simply cannot accept any country challenging its hegemony over global finance. The effect of the Plaza Accord on the economy of Japan, a supposed ally of the US, was noted in China and is one of many reasons for the long-term strategy to de-dollarize their economy.

11 ( +15 / -4 )

The general point of the article is fair enough, but…

Are Shibuya and Minato prices really “typical” of Tokyo, let alone Japan as a whole? No more so than Chelsea is typical of the UK, I’d have thought. And the quoted condominium prices seem to be for new builds. This may be the preference of a middle-class Japanese family, but hey could knock at least a third off their outlay by buying somewhere ten years old.

8 ( +8 / -0 )

Solution: don't live in Tokyo

10 ( +11 / -1 )

The cost of living is going up and hits me personally because I've got three kids.

The article is correct in that raising a family is increasingly difficult, even if some of the evidence given (brand new urban mansion prices etc.) is not especially relevant. The elephant in the room for "families" is the price of food, including staples like fish which I think has nearly doubled in 10 years.

10 ( +10 / -0 )

I was lucky to get here before the bubble economy completely collapsed. For ten years, I worked seven days a week and got my kids through college (in the US) with no loans. Now I'm at the age where I purchase so little that inflation does not affect me. But my kids are starting their families, so I worry about them. I no longer have any money to give.

13 ( +13 / -0 )

These journalistic approaches are an exercise in missing the point.

You can reduce Smartphone use and you don't really need a car (especially if you work from home). Emissions reduction - remember? Bicycles, working locally or from home, no holidays abroad.

Consumer-driven everything, including education, is being taken down. In China, language tuition for profit is being abolished. Western governments are now blocking foreign students (as a national security threat), undermining uni economics. Post-Covid, weakened unis are relying on state funding in their begging bowls, and that is only available for 'economically important subjects' (ie. STEM). Uni courses in the arts and humanities are an acceptable luxury for the rich, but governments don't want large numbers of educated people who see through them and condemn them. As with the Chinese promoting physical education, they want less-educated people filling in for migrant workers.

Comfortably off people won't do these jobs unless driven to by poverty. Poverty and ignorance are two of the most important resources of the nationalist state. Governments need their citizens to be desperate to do any job for cash and retire to bed at the end of the working day too tired to think. Jacking up prices and making people poorer reduces consumer spending and emissions.

Too many people are 'middle class', and there are not enough working class proles for self-sufficiency and emission reduction. So the movement to force a larger working class into unpleasant jobs out of desperation is gathering pace. The new 'middle class' will not be a comfortable existence with lots of stuff, holidays, a degree and a choice of career, made possible by migrant workers. It will just be a bit nicer and a bit posher than the miserable existence of the new working class.

The fun ended when globalisation ended - cheap stuff and a consumer-led society. Our governments are taking us back to the future. You'll need to toughen your kids up for what they have ahead of them.

3 ( +5 / -2 )

"160,000 now." (= Internet+ mobile)

You could go for a 33% cut in my opinion very easily.

And kid's education : if your kid is clever and/or brave enough, he will succeed. I did cost my parents very very little.

Pay only when it is a genuine investment, not a must do by society step (school uniform, giving to local association, buying expensive clothing) and invest abroad too, even if tiny small money to start with !

Sheeps follow the sheperd. Follow your way if you want to succeed.

For Japanese and some countries, brainwashing by politicians has worked well.

3 ( +4 / -1 )

The best way out of poverty is to have an exceedingly large trust fund.

5 ( +7 / -2 )

I think this article was written a while back when gasoline was 117/litre.

4 ( +4 / -0 )

Two way street here. They say housing costs 75000 but you can borrow 25 million and pay a similar fixed amount in repayments.

Yes, you need a job but unemployment isn't a problem....yet.

-1 ( +1 / -2 )

meant to add, you you can borrow 25 million and get yourself a small but nice, new house for that.

1 ( +1 / -0 )

The problem is not the wages its everyone centered in one area! All the employment is centered in the big cities low supply of housing and food increases the demand! If the large corporation were spread out and not just in one city perhaps people can buy homes, work from home and perhaps use economical means to get to and from work by not traveling far on the train or bus.

2 ( +2 / -0 )

That seems to be a quite strange discussion, because if it really were that dramatic, almost no one of the many millions Tokyo citizens could afford daily life there and almost everyone would immediately move away or even dress up as an Ukrainian and mix himself into the immigration streams for Western Europe to get full supply of accommodation and living costs for free. But that’s obviously not the case and even the still more poorer whole countries’ youth moves from other prefectures into the metropolitan areas of Kanto right after high school. There seems to be something wrong with your investigation or observations.

1 ( +2 / -1 )

90 percent of Japanese were proud to call themselves “middle class”

I don't think there was any pride involved. "middle class" in Japan meant neither rich nor poor.

6 ( +6 / -0 )

Ideally, economists generally say, housing for a middle-income family (4.37 million yen a year) would cost 75,000 yen monthly. A family of three, to be at all comfortable, would need “2LDK” – two bedrooms plus living room, dining room and kitchen. 

When I read this, I laughed sarcastically. "Oh yeah. We are a family of three, clean cut, tie and all, in Happy Town Japan, like in the commericals." I'm sure the average income is lower than that for middle class Japan. I'm sure there are kids who are adults now still living with their parents, because the cost of living has gone up, and the same goes for crime and mental illness. That kind of middle class does not exist so much in Japan anymore. Another thing worth noting is the increase in foreign immigration that bring their own values while struggling to have a good living like the so-called "Japanese commercially advertised happy middle class family."

3 ( +4 / -1 )

They forgot to add the annual economic cost to a family of having a 35 year old hikikomori or parasite single staying at home and sponging off the parents.

4 ( +4 / -0 )

I think a big issue for Japan is energy security and dependancy. If there is one major country in Asia that needs to ween itself off gas, coal and oil, it is Japan. Its almost all imported. Get the homegrown energy mix right and that is going to be a big saving. Also, I get the impression labor unions arent exactly strong in Japan. The government encourages private enterprise to do the right thing and pay more, but ultimately there doesnt seem to be any real sting behind that "ask nicely" approach. Population decline is starting to bite, so more workers are imported from SEA. Makes sense. But it probably wont do much to drive wage growth. Quite the opposite.

Also, too many people living the city life. Japan needs a very serious plan for its regions. Its a beautiful country with a lot to offer in the regions. And those areas are FAR better connected than Australia for example. Making housing far more affordable in those areas is a welcome start. Where people live, business follows....

There are some solutions at hand. And I feel Japan is a far more open place than it use to be, which is a big asset. I dont feel gloomy on the economic front regarding Japan if some strong measures are taken.

3 ( +3 / -0 )

Yahoo Japan has the most depressing comment section ever. If you want to hear individual stories on how middle-class life has collapsed in Japan, go to Yahoo Japan.

-4 ( +5 / -9 )

Middle-class life today is a struggle with poverty

Then they are not middle class. The very meaning of middle class is that you are in the middle. Neither rich nor poor. If more than half, (90% by some estimates) of the people are struggling with poverty, and I believe they are, that means that they are not middle class. You can't redefine middle class. Either you are or you aren't. And most Japanese, I believe, are in fact struggling with poverty. I would not be surprised in the least if the figure is 90%. I can easily believe that

-5 ( +8 / -13 )

I can only speak to what I see here in California. I see educated, hard working immigrants come in and do well, while people born here too often don't want to get an education, and don't want to work for a living.

8 ( +9 / -1 )

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