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Living on 3 million yen a year

by Janet Ashby

Is there a conspiracy among Japanese politicians, economic experts and elite bureaucrats to destroy Japan’s egalitarian postwar social and economic systems and replace them with an American-style, dog-eat-dog type of capitalism typified by a society of haves and have-nots? In his best-selling “Nenshu 300 man-en jidai o ikinuku keizaigaku (Economics for Surviving in an Age of Annual Incomes of 3 million yen),” Takuro Morinaga argues that this — deliberately or not — will be the result of Japan’s current policies.

He charges that putting priority on structural reform and bad loan disposal instead of ending deflation hurts ordinary Japanese and helps the rich.

In particular, Morinaga warns, the government’s five-pronged hidden agenda will create a new ruling class in a decade:

1) Create capital through an IT bubble.

2) create deflation through a tight money policy, depress prices, and buy real estate on borrowed money.

3) press banks and buy their collateral real estate cheap.

4) end deflation and get capital gains on that real estate.

5) make sure workers and older industries cannot regain their former position by introducing a dog-eat-dog society.

For most of the postwar period, incomes steadily rose, and white-collar workers at larger companies were virtually guaranteed lifetime employment. In return for handing their lives over to the company, they enjoyed an income of 7 million yen to 8 million a year. Now, however, Morinaga claims, Japan is moving to an American-style system of winners and losers in which at most 10 percent will be winners with high incomes while the remaining 90 percent will see their salaries roughly halved to the global standard of 3 million yen to 4 million yen, or even have to make do with part-time or contract work for 1 million yen a year. The income differential between company president and ordinary white collar workers will rise from 4-to-1 to up to 100-to-1.

So why is there no public outcry? Why do Japanese voters continue to support Koizumi? Morinaga points out that many Japanese have personally experienced inflation, while fewer can remember the greater pain of the Great Depression of the 1930s. Voter anger has been skillfully diverted toward targeting top bankers or simplistic solutions, such as abolishing public highway corporations. In addition, in difficult times, people hunger for strong leaders.

Despite this depressing analysis, Morinaga is surprisingly upbeat, seeing a new chance for workers to break away from the narrowness of life as a company employee and redefine what constitutes a truly rich life. Rather than joining the American rat race, he advocates the European model of enjoying life — working hard but putting one’s family and private life first. He notes in passing that this, in a sense, would be a return to Edo Period values, when commoners couldn’t aspire to becoming samurai but fully enjoyed everyday life.

In Morinaga’s view, one of the major problems is excessive fear of a lower income and lessened job security. With a change in expectations — perhaps a cheaper car or forgoing an overseas trip, for example — one can live a decent life on 3 million yen a year, he says. Morinaga notes that few Argentines have committed suicide despite being in a much worse economic crisis, and even draws up a “Latin index” for different areas of Japan, based on rates of unemployment and suicide. Even if Japanese might be reluctant to become more like the Italians or Argentines, Morinaga feels they should be able to emulate fellow Japanese in areas with a high Latin index, such as Okinawa or Osaka! (The lowest Latin index, by the way, is found in Akita Prefecture.)

In response to reader requests, in a sequel published last month, Morinaga gives practical advice on handling high-cost factors, such as mortgages, life insurance, medical care and taxes. As before, his focus is less on living cheaply per se, than on living a normal life on a lower income and taking responsibility for your own life and personal happiness.

To illustrate the difficulties and rewards of seeking out a new lifestyle, Morinaga tells the stories of four individuals who have done so: a magazine writer who moved to the country and divides his time between writing and farming; a salaryman who started commuting by shinkansen; a civil servant making 8 million yen a year who quit to become an artisan of thatched roofs; and a retired couple who have decided to live communally with others.

Masamichi Kaneko, 44, has found many advantages in commuting roughly 2 1/2 hours by shinkansen from Fukushima Prefecture to his job in Tokyo. Due to lower prices in the country, they’ve been able to buy a house. His children have become stronger and less dependent than when they lived in the city. His daughter, in particular, who was nine at the time of the move, has blossomed in a less clique-ridden school environment. Kaneko has also found his ride each day to be a welcome third space outside of home and job, a private time of his own for switching between the two. Commuting by shinkansen may have hurt his chances of promotion, but on the whole he is very satisfied with his choice.

In addition to these two volumes, there are a number of similar “3 million yen” books on sale, no doubt reflecting the anxiety salarymen are feeling about the future. Let’s hope these are harbingers of a more balanced and human life for company workers and their families.