What Next for Japan?Katz and Ennis posted this to the Council on Foreign Relations website on August 1. OK, OK, OK, that would be August 2 in Japan but...still, not bad.
This past weekend, just two years after his predecessor led the Liberal Democratic Party to its greatest electoral triumph, Japanese Prime Minister Shinzo Abe led it to its worst electoral trouncing since the LDP's founding in 1955. Apparently convinced that little has changed, Abe is trying to hang on. Since the election was for the Diet's upper house but it is the lower house that names the prime minister, Abe has no legal obligation to resign...
Katz is convinced that a recent decline and longterm stagnation in average hourly wages are significant sources of political discontent.
I am not sure that such an assertion holds water. Average wages and incomes are not necessarily indicators of declining personal prosperity for at least five reasons:
1) the unemployment rate is dropping and now stands at 3.7%
2) the number of non-Japanese working in Japan, particularly in the service industries, is at its highest level ever
3) the number of recent high school and college grads who have found work is returning to historical norms
4) the wages of the underemployed 30-40 year olds ("the lost generation") are below historical trend lines
5) the number of people leaving the workforce through retirement (the highest paid workers) is soaring
All of these developments would tend to depress the average wage and average income statistics--without necessarily negative consequences for household spending and the economy. Indeed, the large number of jobs available makes it possible for households to have multiple breadwinners, most of whom will be working part-time to retain scheduling flexibility for child and elder care.
Now an Asahi Shimbun survey, cited by Katz in an online discussion posted to the NBR Japan Forum did find that about 90% of the population feel that they are worse off or at the same level (worse off = 42%, about the same =52%) economically from a year ago. However, I do not see how the voters could come to feel they needed to punish Abe Shinzo at the ballot box for their vague sense of discontent. Heck, if discontent over the economy and one's own wages played a significant role in voting decisions, the LDP would have been defunct after 1998.
Nevertheless, for a rush job, the Katz and Ennis piece is worth checking out.