Japanese women are giving their husbands larger monthly allowances to offset the sales tax hike that kicked off the start of the financial year.
Spending money, often set by wives who control the family budget, rose 2.9 percent to ¥39,572 from last year, said Shinsei Bank Ltd., a Tokyo-based lender whose data go back to 1979. Salarymen spent more on drinking sessions, spending ¥3,483 an average of 2.4 times a month.
While Thursday’s report suggests family budgets may be withstanding April’s 3 percentage point tax increase, allowances remain at about half their 1989 level, at the height of the bubble economy. Prime Minister Shinzo Abe declared the end of deflation in an interview this week, and he now needs companies to dig into record cash piles and boost wages that lag inflation.
“The message is that it’s okay to raise allowances, but only by the amount of the sales tax rise,” said Shinichiro Kobayashi, a senior economist at Mitsubishi UFJ Research and Consulting Co. “It’s clear that real income is falling.”
Allowances for men in their 20s fell 1.6 percent, while those for men aged 30 to 59 rose. Women had ¥36,712 to spend, ¥2,860 less than their male counterparts.
The survey of 2,378 people was conducted online over three days from April 23. The poll included 1,048 male and 536 female full-time company workers, with the rest part-time workers of both sexes.
Even with the increased allowances, Japanese families have cut consumption since the tax rise. Spending by households of two or more people fell 8 percent in May from a year earlier, according to data released Friday, after a 4.6 percent drop in April.
Men’s lunch money rose ¥23 to ¥541, roughly equivalent to the hefty ¥500 coin plus the 8 percent sales tax.
As the Bank of Japan conducts unprecedented easing as it targets 2 percent inflation, restaurants near the bank’s Tokyo building are offering “one-coin” ¥500 lunches.
“The number of lunches costing ¥500 is growing in this area,” said Lu Jianbo, 26, an owner of a Chinese restaurant on ‘BOJ Street.’
Base wages, excluding overtime and bonus payments, fell in April for a 23rd straight month, while average overall pay for Japanese workers was ¥274,241, according to labor ministry data.
The BOJ’s radical stimulus has spurred inflation. Overall consumer prices rose 3.7 percent in May, the most in 23 years, according to data released today.
“Even if salarymen get bigger bonuses, they won’t be able to go drinking and dancing,” Mitsubishi UFJ’s Kobayashi said. “Their tough fight goes on.”
Yoshitaka Okita, a 61-year-old installation worker, sees no economic improvement under Abe’s reflationary policies.
“My allowance has been unchanged for at least 15 years,” Okita said outside Tokyo Station. “I switched from using a car to an electric bicycle because of higher gasoline prices.”