Wednesday, September 24, 2014

Global Bellwether: Japan's Social Depression

Beneath the surface wealth of bullet trains, cute robots and exuberant fashions, this is the Japan few outsiders understand: the one gripped by a deepening social depression.

This week I've highlighted the structural flaws of using GDP as a measure of "growth" and prosperity: GDP = Waste and What Metric Are We Optimizing For?

The conventional metrics of "growth" and prosperity have another fatal flaw: they do not recognize, much less measure, social depression, the social costs of economic stagnation and wealth inequality driven by financialization.

The term social recession has two distinct meanings: around 2000, the term was used to describe the erosion of social cohesion via the decline of institutions such as marriage and the rise of social problems such as teen pregnancy.

Many commentators pinned this erosion of social constraints and bonds on rampant individualism and overstimulated consumerism, while others pointed to urbanization, the commodification of child care, and women entering the workforce en masse to prop up household incomes. Poverty was explicitly rejected as a causal factor, hence the term "social recession."

This concept of social recession was aptly described by Robert E. Lane, author of the 2001 book The Loss of Happiness in Market Democracies:
There is a kind of famine of warm interpersonal relations, of easy-to-reach neighbors, of encircling, inclusive memberships, and of solidary family life... . For people lacking in social support of this kind, unemployment has more serious effects, illnesses are more deadly, disappointment with one's children is harder to bear, bouts of depression last longer, and frustration and failed expectations of all kinds are more traumatic.
I use the term social recession to describe a very different phenomenon: the social and cultural consequences of structurally stagnant economies such as Japan, Europe and the U.S. I have defined and used social recession in this way since 2010: The Non-Financial Cost of Stagnation: "Social Recession" and Japan's "Lost Generations" (August 9, 2010)

Here are the conditions that characterize social recession:

1. High expectations of endless rising prosperity have been instilled in generations of citizens as a birthright.

2. Part-time and unemployed people are marginalized, not just financially but socially.

3. Widening income/wealth disparity as those in the top 10% pull away from the shrinking middle class.

4. A systemic decline in social/economic mobility as it becomes increasingly difficult to move from dependence on the state (welfare) or one's parents to financial independence.

5. A widening disconnect between higher education and employment: a college/university degree no longer guarantees a stable, good-paying job.

6. A failure in the Status Quo institutions and mainstream media to recognize social recession as a reality.

7. A systemic failure of imagination within state and private-sector institutions on how to address social recession issues.

8. The abandonment of middle class aspirations by the generations ensnared by the social recession: young people no longer aspire to (or cannot afford) consumerist status symbols such as luxury autos or homeownership.

9. A generational abandonment of marriage, families and independent households as these are no longer affordable to those with part-time or unstable employment, i.e. what I have termed (following Jeremy Rifkin) the end of work.

10. A loss of hope in the young generations as a result of the above conditions.

At some threshold of structural denial, social recession becomes social depression: a black hole of deteriorating social mobility and opportunity for the younger generations.

I have covered these topics in depth for many years:

What I want to focus on is the willful blindness of official metrics such as GDP, household wealth and unemployment to the realities of social depression, and how these metrics can continue to register gains while the younger generations of workers sink deeper and deeper into full-blown social depression.

Japan has been running a 25-year long experiment in precisely this dynamic:obliterating official recognition with metrics designed to ignore the inconvenient realities of social depression. Beneath the surface wealth of Japan, homeless encampments are expanding even as opportunities for young workers decline.

If the protected class that currently reaps most of the benefits of the Status Quo and owns most of the household wealth becomes even wealthier, this is logged by official metrics as "expansion," i.e. prosperity, even when this "prosperity" is limited to the financial/political Elites and the Upper Caste of the Japanese economy--what another author calls the Clerisy classAmerica's new class system (the Clerisy class).

The Clerisy Class is not unique to America; every structurally stagnant economy is being strangled by its protected Upper Caste.

The Status Quo also masks these realities with tsunamis of upbeat consumerist propaganda. In Japan, this propaganda manifests as ceaseless media coverage of young people with enough time and disposable income to indulge in absurdly exaggerated fashions and fads.

If all this is new to you, I strongly recommend you read my essay The Non-Financial Cost of Stagnation: "Social Recession" and Japan's "Lost Generations" (August 9, 2010).

Here are a few highlights:

-- Once-egalitarian Japan is becoming a nation of haves and have-nots

-- More than one-third of the workforce is part-time as companies have shed the famed Japanese lifetime employment system.

-- The slang word "freeter" (for part-time worker) combines the English "free" and the German "arbeiter" or worker.

-- A typical "freeter" wage is 1,000 yen ($9.20) an hour.

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

-- 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 (pronounced dah-may-ren) get by on odd jobs, low-cost living and drastically diminished expectations.

-- 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.

-- These shifts have 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.

-- The 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.

Is it any wonder that in the face of such a bleak and maladaptive future, young people seek identity, community and solace in a fantasy world of fashion? When an economy is dominated by a Savior State that issues unsustainable promises, and a society is dependent on a consumerist frenzy of fads, status signifiers and shopping for identity and what passes for community, then narcissism, restless emptiness and the aloneness described in The Hidden Cost of the "New Economy": New-Type Depression are the inevitable results.

Beneath the surface wealth of bullet trains, cute robots and exuberant fashions, this is the Japan few outsiders understand: the one gripped by a deepening social depression.

Japan is the global bellwether in social depression, and we can already see the same symptoms and official panic to mask these symptoms in Europe, China and the U.S.

Get a Job, Build a Real Career and Defy a Bewildering Economy(Kindle, $9.95)(print, $20)
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Are you like me? Ever since my first summer job decades ago, I've been chasing financial security. Not win-the-lottery, Bill Gates riches (although it would be nice!), but simply a feeling of financial control. I want my financial worries to if not disappear at least be manageable and comprehensible.

And like most of you, the way I've moved toward my goal has always hinged not just on having a job but a career.

You don't have to be a financial blogger to know that "having a job" and "having a career" do not mean the same thing today as they did when I first started swinging a hammer for a paycheck.

Even the basic concept "getting a job" has changed so radically that jobs--getting and keeping them, and the perceived lack of them--is the number one financial topic among friends, family and for that matter, complete strangers.

So I sat down and wrote this book: Get a Job, Build a Real Career and Defy a Bewildering Economy.

It details everything I've verified about employment and the economy, and lays out an action plan to get you employed.

I am proud of this book. It is the culmination of both my practical work experiences and my financial analysis, and it is a useful, practical, and clarifying read.

Test drive the first section and see for yourself.     Kindle, $9.95     print, $20

"I want to thank you for creating your book Get a Job, Build a Real Career and Defy a Bewildering Economy. It is rare to find a person with a mind like yours, who can take a holistic systems view of things without being captured by specific perspectives or agendas. Your contribution to humanity is much appreciated."
Laura Y.

Gordon Long and I discuss The New Nature of Work: Jobs, Occupations & Careers(25 minutes, YouTube) 

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