Saturday, August 04, 2007

Katz and Ennis on the Electoral Spanking

Credit the dynamic duo from The Oriental Economist for being expeditious:

What Next for Japan?

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 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.

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.


The French Reader said...

Sure. In a study to be published this Fall, a French analyst has estimated that 56% of the potential voters in Japan are now aged 50 or +. And this trend is not going to be reversed any time soon! From that view point, Abe's defeat is rather the direct consequence of the pensions scandal than anything else. And so many ministers were involved in seiji-to-kane-related scandals, the most-stupid-quote-of-the-day-related
affairs (Kyuma, Aso, Yanagisawa) or mysterious media-led scandals (think of Honma Masaaki), that Abe's team was clearly judged as incompetent. That's why Abe needs to listen more to the Japanese's daily problems and to be seen with competent people. Mais ceci est une autre histoire.

Lyons Wakeman said...

Possibly, the issue is not one of a “vague sense of discontent.” Instead, there seems to be a deep and growing sense of pessimism pervading Japanese society. The Japanese people talk about being beset with anxieties about their future. Issues of employment and social inequality dominate the political discourse and popular culture. At least, that is what it looks like to a foreign-based observer. However, you have a much better sense of these things.

I follow a number of polls from Japan such as the regular surveys conducted by Japanese Cabinet Office (annual) and the Institute of Statistical Mathematics (IMS, every 5 years). These have highlighted a growing Japanese pessimism about their society and perceptions about the future. The IMS survey, which has been issued since 1953, reports in 2003 that the Japanese are more dissatisfied with their society than with any other part of their life (family, living standards, health, work) than ever documented. The pervading view seems that post-industrial society is not necessarily a good society. Many feel a sense of resignation and powerlessness.

“The Dignity of the State” that dismissed capitalism as something Western and unJapanese I understand was a bestseller for a very long time. As globalized capitalism transforms Japan’s economy, many see themselves as losers, as victims economically and politically. Abe of the pension disaster and innumerable political misjudgments does not seem to be a leader for the times.