Monday, August 09, 2010

The Non-Financial Cost of Stagnation: "Social Recession" and Japan's "Lost Generations"

Japan's stagnating economy and society are still operating on a postwar model which no longer makes sense. In response, its young generations are opting out of workaholic career paths, marriage and having children.


We in America are already getting a taste of the social costs of grinding economic decline. Young people who are graduating from college find a world of greatly diminished opportunities for full-time employment.


Many of the jobs that are available are free-lance/contract or other temp jobs, or part-time positions which pay one-third of what their parents earn.


Lacking sufficient income, young people are moving back home or staying at home because that is the only financially viable option open to them.


The cheerleaders cranking the hype machine shrilly claim that the U.S. economy will soon start growing smartly. But as this weblog and many others have documented over the past five years, that assumption has essentially no foundation in reality.


Much more likely is an "end to (paying) work" of the sort I have described here many times:


End of Work, End of Affluence (December 5, 2008)


End of Work, End of Affluence I: Cascading Job Losses (December 8, 2008)


End of Work, End of Affluence III: The Rise of Informal Businesses (December 10, 2008)


Endgame 3: The End of (Paying) Work (January 21, 2009)


Demographics and the End of the Savior State (May 17, 2010)


What happens to the social fabric of an advanced-economy nation after a decade or more of economic stagnation? For an answer, we can turn to Japan. The second-largest economy in the world has stagnated in just this fashion for almost twenty years, and the consequences for the "lost generations" which have come of age in the "lost decades" have been dire. In many ways, the social conventions of Japan are fraying or unraveling under the relentless pressure of an economy in seemingly permanent decline.


While the world sees Japan as the home of consumer technology juggernauts such as Sony and Toshiba and high-tech "bullet trains" (shinkansen), beneath the bright lights of Tokyo and the evident wealth generated by decades of hard work and the massive global export machine of "Japan, Inc," lies a different reality: increasing poverty and decreasing opportunity for the nation's youth.


The gap between extremes of income at the top and bottom of society-- measured by the Gini coefficient -- has been growing in Japan for years; to the surprise of many outsiders, once-egalitarian Japan is becoming a nation of haves and have-nots.


The media in Japan have popularized the phrase "kakusa shakai," literally meaning "gap society." As the elite slice of society prospers and younger workers are increasingly marginalized, the media has focused on the shrinking middle class. For example, a bestselling book offers tips on how to get by on an annual income of less than three million yen ($34,800). Two million yen ($23,000) has become the de-facto poverty line for millions of Japanese, especially outside high-cost Tokyo.


More than one-third of the workforce is part-time as companies have shed the famed Japanese lifetime employment system, nudged along by government legislation which abolished restrictions on flexible hiring a few years ago. Temp agencies have expanded to fill the need for contract jobs, as permanent job opportunities have dwindled.


Many fear that as the generation of salaried Baby Boomers dies out, the country's economic slide might accelerate. Japan's share of the global economy has fallen below 10 percent from a peak of 18 percent in 1994. Were this decline to continue, income disparities would widen and threaten to pull this once-stable society apart.


Young Japanese, their expectations permanently downsized, are increasingly opting out of the rigid social systems on which Japan, Inc. was built.


The term "Freeter" is a hybrid word that originated in the late 1980s, just as the Japanese property and stock market bubbles reached their zenith. It combines the English "free" a nd the German "arbeiter," or worker, and describes a lifestyle which is radically different from the buttoned-down rigidity of the permanent-employment economy: freedom to move between jobs.


This absence of loyalty to a company is totally alien to previous generations of driven Japanese "salarymen" who were expected to uncomplainingly turn in 70-hour work weeks at the same company for decades, all in exchange for lifetime employment.


Many young people have come to mistrust big corporations, having seen their fathers or uncles eased out of "lifetime" jobs in the relentless downsizing of the past twenty years. From the point of view of the younger generations, the loyalty their parents unstintingly offered to companies was wasted.


They have also come to see diminishing value in the grueling study and tortuous examinations required to compete for the elite jobs in academia, industry and government; with opportunities fading, long years of study are perceived as pointless.


In contrast, the "freeter" lifestyle is one of hopping between short-term jobs and devoting energy and time to foreign travel, hobbies or other interests.


As long ago as 2001, The Ministry of Health, Labor and Welfare estimates that 50 percent of high school graduates and 30 percent of college graduates now quit their jobs within three years of leaving school.


The downside is permanently downsized income and prospects. Many of the four million "freeters" survive on part-time work and either live at home or in a tiny flat with no bath. A typical "freeter" wage is 1,000 yen ($8.60) an hour.


Japan's slump has lasted so long, a "New Lost Generation" is coming of age, joining Japan's first "Lost Generation" which graduated into the bleak job market of the 1990s.


These trends have led to an ironic moniker for the Freeter lifestyle: Dame-Ren (No Good People). The Dame-Ren get by on odd jobs, low-cost living and drastically diminished expectations.


The decline of permanent employment has led to the unraveling of social mores and conventions. Many young men now reject the macho work ethic and related values of their fathers. These "herbivores" reject the traditonal Samurai ideal of masculinity.


Derisively called "herbivores" or "Grass-eaters," these young men are uncompetitive and uncommitted to work, evidence of their deep disillusionment with Japan's troubled economy.


A bestselling book titled The Herbivorous Ladylike Men Who Are Changing Japan by Megumi Ushikubo, president of Tokyo marketing firm Infinity, claims that about two-thirds of all Japanese men aged 20-34 are now partial or total grass-eaters. "People who grew up in the bubble era (of the 1980s) really feel like they were let down. They worked so hard and it all came to nothing," says Ms Ushikubo. "So the men who came after them have changed."


This has spawned a disconnect between genders so pervasive that Japan is experiencing a "social recession" in marriage, births, and even sex, all of which are declining.


With a wealth and income divide widening along generational lines, many young Japanese are attaching themselves to their parents, the generation that accumulated home and savings during the boom years of the 1970's and 1980's. Surveys indicate that roughly two-thirds of freeters live at home.


Freeters "who have no children, no dreams, hope or job skills could become a major burden on society, as they contribute to the decline in the birthrate and in social insurance contributions," Masahiro Yamada, a sociology professor wrote in a magazine essay titled, Parasite Singles Feed on Family System.


This trend of never leaving home has sparked an almost tragicomical countertrend ofJapanese parents who actively seek mates to marry off their "parasite single" offspring as the only way to get them out of the house.


An even more extreme social disorder is Hikikomori, or "acute social withdrawal," a condition in which the young live-at-home person will virtually wall themselves off from the world by never leaving their room.


Though acute social withdrawal in Japan affect both genders, impossibly high expectations of males from middle and upper middle class families has led many sons, typically the eldest, to refuse to leave the home. The trigger for this complete withdrawal from social interaction is often one or more traumatic episodes of social or academic failure: that is, the inability to meet standards of conduct and success that can no longer be met in diminished-opportunity Japan.


The unraveling of Japan's social fabric as a result of eroding economic conditions for young people offers Americans a troubling glimpse of the high costs of long-term economic stagnation.


There is even a darker side to this disintegration of the social fabric and convention: child abuse is on the rise as well. Sadly, people under long-term stress often take out their multiple frustrations on the weakest, most marginalized people--including children:


Record 44,210 child abuse cases logged in '09


Japan hit by huge rise in child abuse


Both Japan and the U.S. alike desperately need a peaceful revolution in expectations, financial justice (i.e. the absence of fraud, collusion, looting, gaming the system and parasitic leeching by financial and political Elites) and in the social definitions of wealth, security, community, "growth" as a measure of well-being and prosperity, and ultimately, what constitutes meaningful "work."


In effect, postwar Japan grafted a mercantilist export economy based on insane work-hours onto a traditional patriarchal society in which women were expected to sacrifice their autonomy and ambitions for the good of their children, husband and the husband's parents.


The male "salaryman" was expected to sacrifice his life up to retirement to his employer, via 60-70 hour work-weeks and killing commutes. Children were expected to sacrifice their childhood and teen years to study, in order to pass hellishly demanding exams on which their future livelihood, career and income depended.


These extremes of sacrifice might have made sense or seemed necessary to rebuild the nation after World War II. But now, 65 years and three generations after the war, these sacrifices make no sense and are destroying the social fabric of Japan.


Men who work 70 hours a week have no real role in their children's lives, nor are they able to be husbands and fathers in any meaningful day-to-day sense. Understandably, many young Japanese men are opting out of that life of absurd, fundamentally meaningless sacrifice to corporations or the government.


For their part, young women are opting out of the burdens of being in effect a single parent who carries the immense responsibility of guaranteeing the academic success of her son(s) and the marriageability of her daughter(s). Further, as in standard traditional societies, she essentially leaves her own family and throws in her lot with her husband's family, as she is expected to care for his aging parents as a daughter-in-law.


Given these burdens, it's no wonder a third of Japanese young women have not married and have no plans to marry. According to one female author quoted in one of the above articles, Japanese men sometimes propose to women with lines like: "I want you to cook miso soup for me the rest of my life." Quelle surprise that Japan's increasingly educated and well-traveled young women are not impressed with this offer of lifetime menial servitude.


Japan's youth are opting out of its stagnating economy and traditionalist society for good reason: the sacrifices demanded are inhuman and no longer make sense.What Japan needs is 35-hour work-weeks and shared jobs, not 70-hour work-weeks for some and dead-end jobs for half its youth.


If Japan wants to encourage families and women to have children, then it needs to recognize that the sacrifices demanded of young men and women no longer make sense in today's world.


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