Japan Economy Averts Recession: Updated March 15, 2024.

 

Japan averts recession in Oct.-Dec. with 0.4% economic growth

Article Source:  https://mainichi.jp/english/articles/20240311/p2g/00m/0bu/011000c

Note: It was suggest that Japan had entered a recession after initial data was released, but after the revision, it looks like Japan didn't enter a recession.

Ideas:

Many times government stats agencies will give an initial report about the economy, and then later revise it as new data becomes available and or new stats have shown different results.

It is hoped that the new data is not a political idea to make the Japanese economy look better than what it really is.

Japan's fall from number 3 has been a long time coming, as Japan has been in deflation mindset for a very long time.

Most Japanese probably don't even know or feel anything from 3 to 4 in world rankings, as it doesn't really affect their daily lives.

There is a catch 22 situation here. For example the government is worried about inflation and the lack of vigor related to consumer spending. But at the same time, when wages do increase, and companies have to pay for the wage increases by increasing prices, what are consumers going to do then.

And then if and when consumer demand and consumer spending increases, maybe, what are consumers going to do when companies begin to increase prices because of increased demand and increased consumer spending.

Will consumer spending increase, decrease, or lack vigor and that is the question as the Japanese economy comes out of the stagnation and deflation mindset.

Private consumption or consumer spending has never been a strong economic driver in the Japanese economy, as consumer spending just isn't where it should be for a economy of 125 million people.

Japan just doesn't spend as much compared to the US due to maybe a large number of elderly, and it just hasn't been in the nature to spend like US consumers., as Japanese are, or used to be more savers than spenders.

At the same time, because of inflation, more married women, have taken jobs to help families survive in Japan. 

But the jobs women get in Japan are low-level service jobs and not management level jobs, as Japan is one of the worst work environments in advanced countries.

Japan is in the middle of a sever labor shortage and innovation and new technologies are needed to help overcome the shortage.

Also companies are and need to increase wages to attract more workers for their companies, but they also need to provide better benefits and better work/life experiences, that younger workers want these days.

If there is significant wage growth in April of 2024, how much will companies increase prices. to cover the wage increases, or will they use their huge sums of cash they are sitting on for wage increases only.

The challenge is up to 70 percent of the Japanese workers don't work for large Japanese companies, which in April of 2023, gave more of the significant wage increases.

So what is going to happen in 2024, are just large companies, again only, going to give wage increases or all or most companies give wage increases.

If not, there is going to have two-tiered economy of haves and have nots and consumer spending among all income groups is not going to be balanced.

Have a nice day and be safe!

Japan Workstyle: Ideas Later

 

Higher wages, lower pay? 'Annual income ceilings' affect Japan workstyles: survey

Article Source:  https://mainichi.jp/english/articles/20240307/p2a/00m/0bu/014000c

Article: To be deleted after adding ideas.

TOKYO -- Japan's part-time and other irregular laborers have adapted to so-called "annual income ceilings" that discourage people from working more due to obligations to join social insurance when their annual income surpasses a certain amount, causing their take-home pay to shrink.

Seikyororen, or the National Federation of Consumers' Cooperatives Workers' Unions, which organizes many short-time workers including nonregular employees, recently conducted a survey targeting union members who work both below and beyond the annual income ceilings to sound out their thoughts about the system.

As the annual spring labor offensive has gotten underway, momentum for pay hikes is picking up on both the management and labor ends, just as in 2023, due in part to ongoing price hikes. Amid these circumstances, the "annual income ceiling" issue has come under a renewed spotlight. Due to wage growth, workers have in some cases seen their income surpass the threshold for exemption from mandatory social insurance or eligibility for spousal exemptions for income and residential taxes. This gives rise to cases where wages increase yet workers receive less due to taxation and other obligations.

There are several such thresholds, like the 1.06-million-yen (approx. $7,100) and 1.3-million-yen ($8,700) ceilings, and some workers opt to work less to prevent their income going beyond those borderlines. This is said to be a factor contributing to Japan's labor shortages.

In the questionnaire, Seikyororen canvassed 203 part-timers who work beyond the thresholds and have signed into social insurance, and another 204 laborers who work below the borderlines and have not joined social insurance programs, comparing their backgrounds and workstyle decisions.

In the findings announced at a Feb. 22 press conference, 64.4% of workers who have not taken out social insurance said they "haven't thought about" getting insured, while 34.1% answered that they have. When asked the reasons for not thinking about social insurance coverage, with multiple answers permitted, 78% of respondents agreed "the current workstyle is just right" for them, while 32% said they wanted to work short hours to use the remaining time to themselves, indicating that they attach importance to short-time working.

Meanwhile, when those who have thought about enrolling in social insurance were asked why they remain uninsured, 62% responded that it was because their take-home income would go down, while 52% said their husband's spousal benefits would be cut and another 21% revealed that their husband told them to adjust their income within the bounds of being eligible for the allowance for dependents. These results suggest the respondents are focused on the negative aspects of working beyond the annual income ceilings.

When those who have obtained social insurance were asked why they have done so, with multiple answers permitted, 44.8% noted that they thought about their future, followed by 25% who said it had become difficult to continue working short hours, and 23% who said that if they are to get insured anyway, the sooner the better. These respondents apparently appreciated the positive aspects of social insurance enrollment.

In the questionnaire's written section, many uninsured respondents complained that joining social insurance would lower their take-home pay, followed by statements that they cannot work more hours due to household chores, raising children and providing care to family members. These respondents called for pay hikes to the point their take-home income would not be reduced, or lowering user fees for day care and nursing care services.

Among insured respondents, many stated that workers should be able to join social insurance programs regardless of income, followed by calls for raising hourly wages to 1,500 yen (approx. $10) or more.

Seikyororen chairperson Emiko Yanagi commented on the findings, "Some business operators are reluctant to raise wages for nonregular workers, worried those employees may start working less because of the annual income ceilings. However, the survey findings have made clear the need for sharp pay hikes and the improvement of the social security system to allow people to work without undue worries. We'd like to tackle these issues in the spring labor offensive."

Japan Household Spending: Article: Updated March 9, 2024

 

Japan's Jan. household spending down 6.3% as output halt hits autos

Article Source:  https://mainichi.jp/english/articles/20240308/p2g/00m/0bu/008000c

Ideas:

There are always positives and negatives in a market economy, depending on what side of supply and demand you are on.

Usually household spending is considered a positive if spending is good, but a negative if spending is less than expected.

Such as maybe the warm winter weather might have decreased spending on utilities, while a positive for households but maybe a negative for utility companies.

So maybe comes and goes in a market economy and it will always be that with positives  and negatives depending on the situation.

Not sure how Toyota's situation has really affected household spending but maybe they just put them together, unless there was less buying of small cars.

The Japanese economy should be able to handle a decrease in production and shipments related to the Daihatsu situation and it should not be factor in less household spending.

Yes, the Toyota group is significant in the Japanese economy, but it should not affect all things in the Japanese economy.

Unless I am reading completely wrong, it appears the authors are trying to link the Toyota group situation with less household spending in the Japanese economy.

But there are probably many reasons for less household spending such as inflation and consumer fatigue related to the inflation situation.

Again, there are always positives and negatives related to spending in a market economy, depending on which side of supply or demand you are on.

There is the possibility, using the business cycle example, there are always going to be ups and downs in an economy, and maybe now, Japan is in down period of less household and consumer spending, mostly due to the inflation situation.

Not discounting the Toyota group situation, spending on cars/autos is a major purchase and maybe at this time, households just don't want to commit that much to buying a new, and maybe, they are waiting for the April wage increases to get a new car.

As inflation continues in Japan, households/consumers are looking for bargains and sales and substitute items that are less expensive.

Most likely domestic travel in Japan, among Japanese is less than wanted to expected due to higher airline ticket prices and hotel prices, which have also increased since the pandemic has ended.

Of course the weak yen is a deterrent for Japanese travelers who want to travel overseas, but its an incentive for international travelers who want to travel to Japan.

Japan has got to very careful about education spending, as for example spending in South Korea is out of control, and it might be one reason why South Korea has one of the lowest birthrates in the world, as would-be families don't want children because of the high cost of after school programs to keep up with the Kims in society.

Consumer spending or private consumption is maybe 50 percent of Japan's GDP, but it is much lower than the US or maybe even the EU.

For it to significantly affect GDP growth it needs to get in the 60 percent range but the way the Japanese economy is structured, at the present time, its not going to happen.

For example, more women needs to be in leadership positions with more women having a chance to advance their careers.

A new report just suggested that the workplace for women, is near the bottom of OECD advanced countries which should be an embarrassment for Japan, but probably not as Japan, is still focused on men and not all in the economy.

Have a nice day and be safe! 

Japan And Women: Updated on March 16, 2024.

 

Japan 3rd-worst work environment for women of 29 OECD states: The Economist

Article Source:  https://mainichi.jp/english/articles/20240308/p2a/00m/0na/033000c#cxrecs_s

Ideas:

Its unfortunate that Japan is so low, but the US is not much better ranked 22nd. The problem with Japan is not it has a labor shortage but maybe if Japan used is women resources better, it might be able to minimize some of the labor shortages.

Why does Japan has such a low ranking? For decades women were not considered managerial candidates, and for a long time were expected to leave a company when they got married.

But this is a different century and Japanese women are not that interested in getting married, but prefer to focus a career,

But the Japanese corporate world and the world of Japanese politics haven't kept up with what women want out of careers.

Japan is really not that much better than South Korea, which has one of the largest variances between men's salaries in companies and women's salaries in companies.

It seems the Japan corporate world just doesn't want women in managerial positions, and or Japanese women, don't want them or don't feel comfortable in an all men workplace with no women in the company or in other managerial positions.

The Japanese company work environment might be challenging for women, especially working women with children, who might want or need a more flexible work style, but many companies might look down on providing flexible work schedules.

There area some companies have have promoted women into managerial and corporate CEO positions, such as Japan Airlines, which just promoted a long time women employee as company CEO. 

But most Japanese companies are just too entrenched in how they do things and don't even think or consider hiring women into many managerial positions.

Maybe the mindset of Japanese society needs to change. For example, society maybe at one time expected Japanese women to quit their jobs with companies when they got married, and maybe companies were unwilling to take a chance on putting women into managerial tracks, when they knew women would quit the job once they got married.

And or also, maybe many Japanese women don't pursue managerial type jobs due to the fact, that at one time, they knew they would quit once they got married, so why bother with a managerial type job.

But, again, this is supposed to be a different era and women today are not the same as their stay at home mothers or mothers who worked for a company it clerk position, only to leave, as expected, when they got married.

But it seems South Korea and Japan have not entered the 21first century in terms of equal pay for women and or access to managerial positions, being two of the lowest in the OECD.

Is Japan and South Korea making any progress? It doesn't look like it but of course there are now many more women in managerial positions than before and salaries have improved but both countries, like the US too, still have a long way to go to reach the Nordic countries rankings.

Have a nice day and be safe

Japan Household Financial Stress: Ideas Later

 

Requests for Japan gov't help due to financial stress higher again in 2023

Article Source:  https://mainichi.jp/english/articles/20240306/p2g/00m/0na/038000c

Article will be deleted after ideas are added.

TOKYO (Kyodo) -- The number of households in financial stress that sought public assistance in Japan rose for the fourth straight year in 2023, as recent inflation piled pressure on people already hurting in the wake of the coronavirus pandemic, welfare ministry data showed Wednesday.

New applications for welfare benefits increased 7.6 percent from the previous year to 255,079, the most since 2013 when comparable data became available, according to the Health, Labor and Welfare Ministry.

The latest figure suggests some sections of society have failed to see wage rises in line with inflation despite government calls for companies to better support their workers.

Financial assistance is provided to households who cannot maintain a minimum standard of living, as defined by the ministry, despite utilizing their assets and deriving income from employment, social security benefits or support from relatives.

Applicants' earnings are assessed and the government then pays an amount that ensures the household income reaches a minimum figure that varies according to the number of people in the household and whether they live in an urban or rural area.

According to the ministry, applications are rising as those who saw their earnings fall due to the pandemic are dipping into their savings to cover higher food and utility costs at a time when government pandemic support has also been largely withdrawn.

"The impact of the coronavirus pandemic is lingering and the uptrend (in the number of applications) is expected to continue for a while. We will continue to carefully monitor developments," a ministry official said.

For December alone, new applications rose 5.6 percent from the previous year to 18,695, marking the 12th straight monthly increase, the data showed.

The number of households receiving the assistance rose 0.4 percent from a year before to 1,653,778 as of December, including 906,709 households with members aged 65 or older, which comprised 55.1 percent of the total and was flat from a year before.

The number of "other households" that include people who are able to work but are on welfare totaled 260,438, up 2.0 percent from a year earlier, while single-parent households fell 3.5 percent to 65,461, the data showed.

Japan Real Wages: Ideas Later

 

Japan real wages fall in January for 22nd month, down 0.6% on yr

Article Source:  https://mainichi.jp/english/articles/20240307/p2g/00m/0bu/013000c

Japan Capital Spending: Ideas Later

 

Japan's capital spending jumps 16.4% in Oct.-Dec., in boost to GDP

Article Source:    https://mainichi.jp/english/articles/20240304/p2g/00m/0bu/006000c