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Many of us have a vision of Japan from when we were younger. But in modern times their economy is much closer to a developing country. The median income in Japa

Many of us have a vision of Japan from when we were younger. But in modern times their economy is much closer to a developing country. The median income in Japan is $25,313. [1] The median income in the US is $47,960. [2] If we consider only full time year-round employment (which is probably closer to what Japan is measuring), it's $60,070. Ever inflating house prices are caused by high demand and ease of access of debt. It predictably leads to endless price appreciation until you fill the bubble up enough to burst it, then we simply repeat again. Same thing happened to education. It's a 'commodity' seen as priceless and the government ensured access to endless debt to purchase it. You'll never guess what happened next. [1] - https://blog.gaijinpot.com/what-is-the-average-salary-in-japan/ https://blog.gaijinpot.com/what-is-the-average-salary-in-jap... [2] - https://en.wikipedia.org/wiki/Personal_income_in_the_United_States https://en.wikipedia.org/wiki/Personal_income_in_the_United_...

vannevar 1y ago
The analogy of education to housing "bubbles" doesn't work. Housing bubbles are economically destructive because dropping prices induce new sellers to drop their price even further, which reduces the market value for everyone. There is a reinforcement loop. No such mechanism happens in education, once you have your degree it is yours forever. There is no secondary market. If the value goes down, sure, other people will not pay as much for new degrees, but there's no direct connection between the market value and the tuition. There is no reinforcement loop.
- somenameforme 1y ago
  Of course there's a connection. The most realistic reason people go to college is to earn more money later in life. Nobody would ever voluntarily go 6 figures into debt with the understanding that, at the end of it all, the best job they're going to be able to find is to go serve coffee. And especially in the era of the internet the concept of college being a necessity to educate oneself is rather plainly artificial, and it's also highly debatable whether the current GPA inflated profit motivated degree treadmills that colleges have turned into is even providing a meaningful education.
  - vannevar 1y ago
    >Of course there's a connection. A connection, yes, but not a feedback loop. A drop in the value of a degree does not lead to everyone panic-selling their degree. What you're describing is simple ROI---as the return on the education investment declines, people reduce their investment in degrees. But falling tuition does not further reduce the ROI, as in the case of housing where there is a general expectation of appreciation, and therefore, speculation.
jncfhnb 1y ago
Income is a terrible metric for identifying a developing country. Japan is clearly developed. Housing in Japan is kept sensible in large part thanks to their land value tax for real estate.
- fc417fc802 1y ago
  Seems like a baseless claim to me. Even just visually their zoning (or lack thereof) is obviously quite different. When prices are high anyone who owns has incentive to prevent the supply problem from being fixed.
  - jncfhnb 1y ago
    > When prices are high anyone who owns has incentive to prevent the supply problem from being fixed. Unless… you have a land value tax
- deleted 1y ago
  [deleted]
- somenameforme 1y ago
  The point of the economic numbers is that what's affordable from a Western perspective is not for a Japanese person. You're talking about a country where 50% of workers earn less than $25,000 per year! A $200k house in the US is generally considered very affordable. In Japan that's 8 years of salary for half the country, and easily a 20+ year mortgage. Their housing prices are being further depressed by the fact that they're now dying off fast enough that even Tokyo's population is starting to significantly decline. And that, in turn, is further compounded by a prevalent superstition in Japan against living in a house where somebody died, which helps to further reduce demand for many housing units that 'become available.'
  - jncfhnb 1y ago
    shrug. Doesn’t contradict anything I said. Japan is not a developing country.

vannevar 1y ago

The analogy of education to housing "bubbles" doesn't work. Housing bubbles are economically destructive because dropping prices induce new sellers to drop their price even further, which reduces the market value for everyone. There is a reinforcement loop. No such mechanism happens in education, once you have your degree it is yours forever. There is no secondary market. If the value goes down, sure, other people will not pay as much for new degrees, but there's no direct connection between the market value and the tuition. There is no reinforcement loop.

somenameforme 1y ago
Of course there's a connection. The most realistic reason people go to college is to earn more money later in life. Nobody would ever voluntarily go 6 figures into debt with the understanding that, at the end of it all, the best job they're going to be able to find is to go serve coffee. And especially in the era of the internet the concept of college being a necessity to educate oneself is rather plainly artificial, and it's also highly debatable whether the current GPA inflated profit motivated degree treadmills that colleges have turned into is even providing a meaningful education.
- vannevar 1y ago
  >Of course there's a connection. A connection, yes, but not a feedback loop. A drop in the value of a degree does not lead to everyone panic-selling their degree. What you're describing is simple ROI---as the return on the education investment declines, people reduce their investment in degrees. But falling tuition does not further reduce the ROI, as in the case of housing where there is a general expectation of appreciation, and therefore, speculation.

jncfhnb 1y ago

Income is a terrible metric for identifying a developing country. Japan is clearly developed. Housing in Japan is kept sensible in large part thanks to their land value tax for real estate.

fc417fc802 1y ago
Seems like a baseless claim to me. Even just visually their zoning (or lack thereof) is obviously quite different. When prices are high anyone who owns has incentive to prevent the supply problem from being fixed.
- jncfhnb 1y ago
  > When prices are high anyone who owns has incentive to prevent the supply problem from being fixed. Unless… you have a land value tax
deleted 1y ago
[deleted]
somenameforme 1y ago
The point of the economic numbers is that what's affordable from a Western perspective is not for a Japanese person. You're talking about a country where 50% of workers earn less than $25,000 per year! A $200k house in the US is generally considered very affordable. In Japan that's 8 years of salary for half the country, and easily a 20+ year mortgage. Their housing prices are being further depressed by the fact that they're now dying off fast enough that even Tokyo's population is starting to significantly decline. And that, in turn, is further compounded by a prevalent superstition in Japan against living in a house where somebody died, which helps to further reduce demand for many housing units that 'become available.'
- jncfhnb 1y ago
  shrug. Doesn’t contradict anything I said. Japan is not a developing country.