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This needs to be taken within the context of Japan hosting one of the largest economies in the world, despite being substantially smaller in population than cou

by bsanr2 7y ago

This needs to be taken within the context of Japan hosting one of the largest economies in the world, despite being substantially smaller in population than countries with economies of comparable size; and also in that their real wage losses 1) pale in comparison to America's, and 2) mean that their real wages are still much higher than most of the world's. I've heard it put that Japan's economy makes it relatively easy to live a stable middle class lifestyle, though almost impossible to accrue substantial wealth. I understand why this may seem horrifying to some, but looking at the relative affluence of the average Japanese compared to the average American, I don't see their situation as particularly dire.

iateanapple 7y ago
> I've heard it put that Japan's economy makes it relatively easy to live a stable middle class lifestyle Agreed. If they fixed up their lack of work/life balance it would be a workers paradise.
adventured 7y ago
> despite being substantially smaller in population than countries with economies of comparable size Which countries would that be? There are very few with economies of comparable size. The next above Japan is nearly three times larger (China). Besides, it's super easy to avoid that GDP / population confusion by looking at GDP per capita. The US GDP per capita figure ($65,111) for 2019 was 59% higher than Japan ($40,846), which has been tumbling down the per capita rankings for 25 years. For reference, in 1995 Japan's GDP per capita was $43,440, nearly the highest of any nation. The inflation adjustment on that is $74,600. So not only is Japan missing $34,000 just to break even on inflation, by contracting 6% over that time, they've actually shrank drastically in real terms. Since 1995 US GDP per capita has increased by about 127% by contrast, exceeding inflation by about $15,000. The other legitimate comparables: Germany is ~15% higher per capita, Britain and France are nearly the same (only slightly higher than Japan). In 1995 Japan had a GDP per capita 100% higher than Britain, now they're even. Japan ranks #19 on GDP per capita (excluding tiny nations like Luxembourg). > and also in that their real wage losses 1) pale in comparison to America's, and 2) mean that their real wages are still much higher than most of the world's. That's not even remotely close to being true. The US has outperformed Japan dramatically on both GDP per capita and incomes. At the end of 2019, real US wages (both median and average) were at new all-time highs, according to the Federal Reserve. The full-time median income in the US hit near $50,000 for 2019, Japan doesn't come close to that. Japan's peak on real incomes was hit 25 years ago. They've lost about 1/3 of their real personal income since then. Japan went from having one of the highest income figures, to struggling to remain in the top 20. US wages remain among the highest of any nation (including on disposable incomes), comparable only to countries like Sweden, Switzerland, Denmark and Norway. Here are the average wages in the OECD. Japan ranks about 10% below the OECD average. The US is dramatically higher, ranking just behind Switzerland. https://data.oecd.org/earnwage/average-wages.htm https://data.oecd.org/earnwage/average-wages.htm Here is the OECD better life index page on incomes: http://www.oecdbetterlifeindex.org/topics/income/ http://www.oecdbetterlifeindex.org/topics/income/ Japan ranks in the middle of the pack, the US ranks at the front of the pack. Here is the Wikipedia page on median incomes: https://en.wikipedia.org/wiki/Median_income https://en.wikipedia.org/wiki/Median_income Japan again ranks well behind the US, and on disposable income ranks dramatically far behind the US. More: https://en.wikipedia.org/wiki/List_of_countries_by_average_wage https://en.wikipedia.org/wiki/List_of_countries_by_average_w... https://en.wikipedia.org/wiki/Disposable_household_and_per_capita_income https://en.wikipedia.org/wiki/Disposable_household_and_per_c...
- bsanr2 7y ago
  Yes, China and the US, which are both substantially larger in population. Japan also outperforms most countries that outsize it in terms of population. >Besides, it's super easy to avoid that GDP / population confusion by looking at GDP per capita. Not so much. A high GDP per capita is a poor measure of the average person's economic wellbeing on its own. Looking at it within the context of measures of economic inequality helps to mitigate the misconceptions that could otherwise arise. For example, according to this Wikipedia article and its cited sources [1], Japan's rich/poor 10% average income ratio is 4.5. Compare to America, whose 18.5 is much closer to China's 21.6, and far away from France's 9.1 and Germany's 6.9. What this means is that America's GDP per capita is substantially more affected by the high incomes of the highest earners than Japan's. In other words, the average American sees less of the benefits of that high GDP per capita than the average Japanese sees of their somewhat lower GDP per capita. That's just income. Japan's wealth GINI indicates substantially more equality in that regard than for America. [2] >At the end of 2019, real US wages (both median and average) were at new all-time highs, according to the Federal Reserve. I'd like to see that citation. It's well-known that most wages for Americans, indexed against GDP, have fallen or remained flat since the 70s. The vast majority of the income gains have accumulated in the hands of the upper 2 quintiles. This is especially troublesome for Americans as (re: the subject of this comment section) the housing situation in Japan differs greatly from America's skyrocketing housing values in major metro areas; medical insurance and care in America is substantially more expensive; and the cost and quality of education is higher and less stable, respectively, in America than in Japan. This is today, after our respective economic histories over the past few decades. What your numbers suggest is that Japan was very wealthy for a limited period of time and is now regressing towards the mean that would be suggested by their population size and level of development. However, the character of their economic and institutional policy is making this decline smoother and more comfortable than anything we're likely to see. I continue to hold that this is preferable. 1 - https://en.m.wikipedia.org/wiki/List_of_countries_by_income_equality https://en.m.wikipedia.org/wiki/List_of_countries_by_income_... 2 - https://en.wikipedia.org/wiki/List_of_countries_by_wealth_equality https://en.wikipedia.org/wiki/List_of_countries_by_wealth_eq...
  - danielscrubs 7y ago

by bsanr2 7y ago

iateanapple 7y ago

> I've heard it put that Japan's economy makes it relatively easy to live a stable middle class lifestyle Agreed. If they fixed up their lack of work/life balance it would be a workers paradise.

adventured 7y ago

> despite being substantially smaller in population than countries with economies of comparable size Which countries would that be? There are very few with economies of comparable size. The next above Japan is nearly three times larger (China). Besides, it's super easy to avoid that GDP / population confusion by looking at GDP per capita. The US GDP per capita figure ($65,111) for 2019 was 59% higher than Japan ($40,846), which has been tumbling down the per capita rankings for 25 years. For reference, in 1995 Japan's GDP per capita was $43,440, nearly the highest of any nation. The inflation adjustment on that is $74,600. So not only is Japan missing $34,000 just to break even on inflation, by contracting 6% over that time, they've actually shrank drastically in real terms. Since 1995 US GDP per capita has increased by about 127% by contrast, exceeding inflation by about $15,000. The other legitimate comparables: Germany is ~15% higher per capita, Britain and France are nearly the same (only slightly higher than Japan). In 1995 Japan had a GDP per capita 100% higher than Britain, now they're even. Japan ranks #19 on GDP per capita (excluding tiny nations like Luxembourg). > and also in that their real wage losses 1) pale in comparison to America's, and 2) mean that their real wages are still much higher than most of the world's. That's not even remotely close to being true. The US has outperformed Japan dramatically on both GDP per capita and incomes. At the end of 2019, real US wages (both median and average) were at new all-time highs, according to the Federal Reserve. The full-time median income in the US hit near $50,000 for 2019, Japan doesn't come close to that. Japan's peak on real incomes was hit 25 years ago. They've lost about 1/3 of their real personal income since then. Japan went from having one of the highest income figures, to struggling to remain in the top 20. US wages remain among the highest of any nation (including on disposable incomes), comparable only to countries like Sweden, Switzerland, Denmark and Norway. Here are the average wages in the OECD. Japan ranks about 10% below the OECD average. The US is dramatically higher, ranking just behind Switzerland. https://data.oecd.org/earnwage/average-wages.htm https://data.oecd.org/earnwage/average-wages.htm Here is the OECD better life index page on incomes: http://www.oecdbetterlifeindex.org/topics/income/ http://www.oecdbetterlifeindex.org/topics/income/ Japan ranks in the middle of the pack, the US ranks at the front of the pack. Here is the Wikipedia page on median incomes: https://en.wikipedia.org/wiki/Median_income https://en.wikipedia.org/wiki/Median_income Japan again ranks well behind the US, and on disposable income ranks dramatically far behind the US. More: https://en.wikipedia.org/wiki/List_of_countries_by_average_wage https://en.wikipedia.org/wiki/List_of_countries_by_average_w... https://en.wikipedia.org/wiki/Disposable_household_and_per_capita_income https://en.wikipedia.org/wiki/Disposable_household_and_per_c...

bsanr2 7y ago
Yes, China and the US, which are both substantially larger in population. Japan also outperforms most countries that outsize it in terms of population. >Besides, it's super easy to avoid that GDP / population confusion by looking at GDP per capita. Not so much. A high GDP per capita is a poor measure of the average person's economic wellbeing on its own. Looking at it within the context of measures of economic inequality helps to mitigate the misconceptions that could otherwise arise. For example, according to this Wikipedia article and its cited sources [1], Japan's rich/poor 10% average income ratio is 4.5. Compare to America, whose 18.5 is much closer to China's 21.6, and far away from France's 9.1 and Germany's 6.9. What this means is that America's GDP per capita is substantially more affected by the high incomes of the highest earners than Japan's. In other words, the average American sees less of the benefits of that high GDP per capita than the average Japanese sees of their somewhat lower GDP per capita. That's just income. Japan's wealth GINI indicates substantially more equality in that regard than for America. [2] >At the end of 2019, real US wages (both median and average) were at new all-time highs, according to the Federal Reserve. I'd like to see that citation. It's well-known that most wages for Americans, indexed against GDP, have fallen or remained flat since the 70s. The vast majority of the income gains have accumulated in the hands of the upper 2 quintiles. This is especially troublesome for Americans as (re: the subject of this comment section) the housing situation in Japan differs greatly from America's skyrocketing housing values in major metro areas; medical insurance and care in America is substantially more expensive; and the cost and quality of education is higher and less stable, respectively, in America than in Japan. This is today, after our respective economic histories over the past few decades. What your numbers suggest is that Japan was very wealthy for a limited period of time and is now regressing towards the mean that would be suggested by their population size and level of development. However, the character of their economic and institutional policy is making this decline smoother and more comfortable than anything we're likely to see. I continue to hold that this is preferable. 1 - https://en.m.wikipedia.org/wiki/List_of_countries_by_income_equality https://en.m.wikipedia.org/wiki/List_of_countries_by_income_... 2 - https://en.wikipedia.org/wiki/List_of_countries_by_wealth_equality https://en.wikipedia.org/wiki/List_of_countries_by_wealth_eq...
- danielscrubs 7y ago