Lifted from comments -
Following up on my post casting doubt on some of the assertions made in Jesper Koll's "I'm The Last Japan Optimist" TED presentation, commenter Troy has produced a graph of the the population data and populations projections for persons in their earnings upswing years in both Japan and the United States. (Link)
Pretty sobering is it not?
Japan, on the way down (gently) since 1974.
Sure, you can put in a lot of robots to make up for the decline in available workers -- but those robots are really lousy consumers.
Showing posts with label economic miracle generation. Show all posts
Showing posts with label economic miracle generation. Show all posts
Saturday, January 26, 2013
Monday, January 07, 2013
A Spot Perhaps Not So Sweet
I heard a version of Jesper Koll's Japan bull speech
(Link)
in December.
Here is my biggest problem with it.
At 4:34 in the video, Koll shows a graph of the wages and bonuses a typical salaried worker receives over his or her lifetime. Wages remain low over the first 15 years of work, then rise rapidly, reach a peak at around 55 years of age, whereupon they decline until retirement.
According to Koll, the passage of the "Mick Jagger" generation (Jagger was born in 1943) from its wage peak and into wage decline and retirement accounts for 80% of observed deflation. One has to assume he is talking about consumer prices deflation. He is clearly not talking about deflation in real estate -- that he accounts for differently. He does not even mention deflation in equities, an interesting choice given his day job.
According to Koll, the massive deflationary pressure from declining wages and bonuses will reverse as the children of the Mick Jagger generation enter their high wage post-40 years of age period.
Ummm, cannot say that I agree.
On the first of this month, the Ministry of Health, Labour and Welfare released this graph.
Let us look first at the top solid line.
[Source]
In 1949, births topped out at a never-to-be-seen again 2,678,792. They fell precipitously, bottoming out at 1,566,713 in 1957 -- a 42% drop in just 12 years' time. Births recovered as the Mick Jagger generation began having children, peaking at 2,091,983 in 1973 (note - half of this generation have already entered the stage when their earnings accelerate). This new peak of births is 32% smaller than the 1949 peak.
After 1973, births fell slightly less precipitously than after 1949, hitting 1,431,577 in 1985 -- a 12 year fall of 32%. However, unlike in 1957, births have never recovered. Births have fallen slowly but steadily, declining 38% over the last 27 years, falling below the number of deaths (thick dotted line) in 2007.
So what does all this mean?
a) the numerically largest generation ever is leaving the workforce.
b) a numerically large generation is entering its high-wage period. However, their numbers are only around 75% of the generation whose total earning power they are supposed to be replacing.
c) there are dramatically fewer children and young people to serve as consumers and workers. Good for them on an individual level as they will (in theory!) be able to bid up wages and demand lower prices for goods. Bad for the country in terms of aggregate spending.
d) With births below replacement level, total population -- i.e., total consumption -- is going down and at an accelerating rate, the number of deaths over birth rising from 18,516 in 2007 to 210,000 last year.
Koll is probably right about a boom coming on. However, it is for the folks selling investments and savings vehicles to the echo generation. That generation has to plan for lifespans of 90 years and for taking care of elderly parents for two decades before falling themselves into decrepitude -- all with little help from whatever survives of the national pension system.
A surge in spending due to rising wages and bonuses? The birth and death numbers do not offer solace.
And no no one in the Diet is losing much sleep over the implications of the above graph. To borrow a simile from Chris Rock, statistics and macro are like kryptonite to this blessed land's parliamentarians.
(Link)
in December.
Here is my biggest problem with it.
At 4:34 in the video, Koll shows a graph of the wages and bonuses a typical salaried worker receives over his or her lifetime. Wages remain low over the first 15 years of work, then rise rapidly, reach a peak at around 55 years of age, whereupon they decline until retirement.
According to Koll, the passage of the "Mick Jagger" generation (Jagger was born in 1943) from its wage peak and into wage decline and retirement accounts for 80% of observed deflation. One has to assume he is talking about consumer prices deflation. He is clearly not talking about deflation in real estate -- that he accounts for differently. He does not even mention deflation in equities, an interesting choice given his day job.
According to Koll, the massive deflationary pressure from declining wages and bonuses will reverse as the children of the Mick Jagger generation enter their high wage post-40 years of age period.
Ummm, cannot say that I agree.
On the first of this month, the Ministry of Health, Labour and Welfare released this graph.
Let us look first at the top solid line.
[Source]
In 1949, births topped out at a never-to-be-seen again 2,678,792. They fell precipitously, bottoming out at 1,566,713 in 1957 -- a 42% drop in just 12 years' time. Births recovered as the Mick Jagger generation began having children, peaking at 2,091,983 in 1973 (note - half of this generation have already entered the stage when their earnings accelerate). This new peak of births is 32% smaller than the 1949 peak.
After 1973, births fell slightly less precipitously than after 1949, hitting 1,431,577 in 1985 -- a 12 year fall of 32%. However, unlike in 1957, births have never recovered. Births have fallen slowly but steadily, declining 38% over the last 27 years, falling below the number of deaths (thick dotted line) in 2007.
So what does all this mean?
a) the numerically largest generation ever is leaving the workforce.
b) a numerically large generation is entering its high-wage period. However, their numbers are only around 75% of the generation whose total earning power they are supposed to be replacing.
c) there are dramatically fewer children and young people to serve as consumers and workers. Good for them on an individual level as they will (in theory!) be able to bid up wages and demand lower prices for goods. Bad for the country in terms of aggregate spending.
d) With births below replacement level, total population -- i.e., total consumption -- is going down and at an accelerating rate, the number of deaths over birth rising from 18,516 in 2007 to 210,000 last year.
Koll is probably right about a boom coming on. However, it is for the folks selling investments and savings vehicles to the echo generation. That generation has to plan for lifespans of 90 years and for taking care of elderly parents for two decades before falling themselves into decrepitude -- all with little help from whatever survives of the national pension system.
A surge in spending due to rising wages and bonuses? The birth and death numbers do not offer solace.
And no no one in the Diet is losing much sleep over the implications of the above graph. To borrow a simile from Chris Rock, statistics and macro are like kryptonite to this blessed land's parliamentarians.
Thursday, December 20, 2012
Women, Population and Work - Another Look
The other day I introduced the interesting reversal in trends in attitudes regarding women and work to be found in the "Survey on Social Participation of Men and Women" (Danjo kyodo sanka shakai in kan suru yoron chosa) released on December 17. For the benefit of those who were unable to find the graphs in question, I reproduce them below, with links to the original pages.
"The husband should be outside working; the wife should keep house"
(Link - J)
"It is all right for women to continue working, even after they have children"
(Link - J)
In both cases, we see the onset of a wave of young fogies, where youngsters in the 20-to-29 years of age cohort have attitudes toward the roles of women, marriage and childrearing resembling those of persons 60 years of age and older, rather than their immediate superiors.
This is a new phenomenon. In previous surveys the youngest cohort has been among the most comfortable with wives working or women staying in the workforce.
Why the sudden reversal? The survey does not ask the respondents why they feel the way they do. I called the cohort the "echo boomers" -- the counterpart of the children of the baby boomers found in population pyramids for the United States. It would probably be better to call the current cohort of 20-to-29 year olds the Bubble Babies -- those born when Japan's rise in GDP and climb up the per capita income ladder were topping out, when families could live comfortably on but a single salary.
The 20-29 age cohort is struggling. In part this is because of the depressed economy, which has reduced the capacity and willingness of companies to hire large numbers of permanent workers.
The youngest cohort may also be struggling due to a lack of education. Today's 20-29 year olds are the first age cohort is to have all its members educated under yutori kyoiku ("easy-going education") system. The lowering of academic requirements and the decrease in the number of class hours may have left this cohort far less prepared for independent life than the cohorts that preceded it.
An aside - the yutori kyoiku reforms were repealed for elementary school children starting in 2002. The last children educated under the loosened system will graduate from high school in 2014. So when you find "strengthening the education system" in a political party's manifesto, the party in question is not really talking about improving education. That train left the station long ago. "Improving education" is a smokescreen for foisting more patriotism and officially traditional mores upon children and breaking the backs of teachers' unions.
As for the role of women in public life, two pictures from yesterday:
The advent of an LDP government is predicted to lead to one improvement in the atmospherics of government: women in prominent cabinet roles. Whereas the purportedly liberal Democratic Party had only token appointments of women--prime minister Kan Naoto's and prime minister Noda Yoshihiko's cabinets having but a single woman in them -- the incoming Abe Shinzo cabinet may have as many as five women members. Koike Yuriko and Takaichi Sanae (one of the rare women to have graduated from the Matsushita Institute of Government and Management) are almost certain to be named to prominent posts.
Conservative parties -- the pathways to power for women in East Asia.
----------------------
Image courtesies:
Top photo: Wall Street Journal
Bottom photo: Yomiuri Shimbun
"The husband should be outside working; the wife should keep house"
"It is all right for women to continue working, even after they have children"
In both cases, we see the onset of a wave of young fogies, where youngsters in the 20-to-29 years of age cohort have attitudes toward the roles of women, marriage and childrearing resembling those of persons 60 years of age and older, rather than their immediate superiors.
This is a new phenomenon. In previous surveys the youngest cohort has been among the most comfortable with wives working or women staying in the workforce.
Why the sudden reversal? The survey does not ask the respondents why they feel the way they do. I called the cohort the "echo boomers" -- the counterpart of the children of the baby boomers found in population pyramids for the United States. It would probably be better to call the current cohort of 20-to-29 year olds the Bubble Babies -- those born when Japan's rise in GDP and climb up the per capita income ladder were topping out, when families could live comfortably on but a single salary.
The 20-29 age cohort is struggling. In part this is because of the depressed economy, which has reduced the capacity and willingness of companies to hire large numbers of permanent workers.
The youngest cohort may also be struggling due to a lack of education. Today's 20-29 year olds are the first age cohort is to have all its members educated under yutori kyoiku ("easy-going education") system. The lowering of academic requirements and the decrease in the number of class hours may have left this cohort far less prepared for independent life than the cohorts that preceded it.
An aside - the yutori kyoiku reforms were repealed for elementary school children starting in 2002. The last children educated under the loosened system will graduate from high school in 2014. So when you find "strengthening the education system" in a political party's manifesto, the party in question is not really talking about improving education. That train left the station long ago. "Improving education" is a smokescreen for foisting more patriotism and officially traditional mores upon children and breaking the backs of teachers' unions.
As for the role of women in public life, two pictures from yesterday:
President-elect Park Geun-hye celebrating her victory in the South Korean presidential election.
Former Defense Minister Koike Yuriko at an unserious danpatsu event. Koike had sworn she would not cut her hair until the Liberal Democratic Party had retaken power. Yesterday she let 64 friends and supporters take a snippet from her uncharacteristically shoulder-length locks.
The advent of an LDP government is predicted to lead to one improvement in the atmospherics of government: women in prominent cabinet roles. Whereas the purportedly liberal Democratic Party had only token appointments of women--prime minister Kan Naoto's and prime minister Noda Yoshihiko's cabinets having but a single woman in them -- the incoming Abe Shinzo cabinet may have as many as five women members. Koike Yuriko and Takaichi Sanae (one of the rare women to have graduated from the Matsushita Institute of Government and Management) are almost certain to be named to prominent posts.
Conservative parties -- the pathways to power for women in East Asia.
----------------------
Image courtesies:
Top photo: Wall Street Journal
Bottom photo: Yomiuri Shimbun
Thursday, November 22, 2012
A Snap Reaction To The LDP's 2012 Election Manifesto
Amaterasu, what a miserable, crabbed, didactic, incurious, facile, paranoid and delusional pair of documents the Liberal Democratic Party has foisted upon us..and that is the reaction after only reading the sections on education reform! I shudder to think what I will find in the foreign policy and security section.
What have the children of the 1950s and 1960s produced for our edification and delight?
- the glossy color synopsis (Link - J)
- the black and white long form (Link - J)
In case anyone on this lonely blue orb ever needed a reminder of why the defenestration of the LDP was a cause for celebration, these lists of simply awful campaign promises provide the aide mémoire.
As for those who had hoped the LDP might have learned something during its 3+ years out of power, the manifesto documents prove the contrary. The party, like its American corollate, is spinning its intellectual wheels, stuck in the later half of the 20th century.
What have the children of the 1950s and 1960s produced for our edification and delight?
- the glossy color synopsis (Link - J)
- the black and white long form (Link - J)
In case anyone on this lonely blue orb ever needed a reminder of why the defenestration of the LDP was a cause for celebration, these lists of simply awful campaign promises provide the aide mémoire.
As for those who had hoped the LDP might have learned something during its 3+ years out of power, the manifesto documents prove the contrary. The party, like its American corollate, is spinning its intellectual wheels, stuck in the later half of the 20th century.
Tuesday, May 22, 2012
Sky Tree Downs Averted
In a few minutes' time the Tokyo Sky Tree, the world's tallest free-standing tower, opens for business. I must confess I am royally sick of the whole circus surrounding what is, in grossest fact, just a tower from which to beam out digital broadcast signals, the 1958 vintage Tokyo Tower being too short (333 m) for the job.
I am sick of the pun on the height of the Sky Tree, 634 meters = 6 Mutsu + 3 san + 4 shi = Musashi, the name of the ancient province where much of modern Tokyo is now located (J). I am sick of the product tie-ins. I am sick of the uniforms of the information girls. I am sick of the cost to ride up to the second observation level: 3000 yen, or US$37.85 at current rates. I am sick of everyone's ignoring the reality that compared to the Burj Al-Khalifa, the Tokyo Sky Tree is a pipsqueak.
Leave it up to the cartoonist at the Tokyo Shimbun to find a new, refreshing angle to look at the opening, one that can make even a grump like me smile:
In the first panel, citizens are looking up with safety glasses at the ring eclipse that appeared in the skies above Tokyo on May 21.
In the second, the people are looking up with cameras, binoculars and the naked eye at the Sky Tree, which opens for business today, May 22.
In the third panel, Prime Minister Noda Yoshihiko remarks to Democratic Party of Japan Secretary-General Koshi'ishi Azuma, "The citizens of Japan have come alive, haven't they?" Koshi'ishi cannot for the life of him understand what has the PM thinking this way.
The hook in this instance is in the title on the left of the panels. It reads:
The song, by composer Nakamura Hachidai and lyricist Ei Rosuke, was a huge hit for the singer Sakamoto Kyu in 1961. It begins with what is probably the third best known opening line of any Japanese song, after the national anthem and "Sakura, sakura":
In the song, the young man is trying not to cry but ends up doing so because he is all alone. However, he vows to keep looking up -- just as the whole of the country was, hoping for a better tomorrow.
Here is Sakamoto singing and whistling the song in 1983 (You Tube).
Hence Prime Minister Noda's conclusion, after two straight day of people looking up: "Hey, the hope is back!"
Of course, the song has a tragic coda. Sakamoto died in the JAL 123 air disaster of August 12, 1985 -- still the worst single-plane air accident in history. The 747, crammed with passengers heading home for the Obon holidays, lost its the hydraulic steering system a few minutes after takeoff, becoming a veering, swerving uncontrolled mass of terror. After 44 minutes of out-of-control flight, the plane plowed into a mountainside in Gunma Prefecture, killing 520 passengers and crew.
I am sick of the pun on the height of the Sky Tree, 634 meters = 6 Mutsu + 3 san + 4 shi = Musashi, the name of the ancient province where much of modern Tokyo is now located (J). I am sick of the product tie-ins. I am sick of the uniforms of the information girls. I am sick of the cost to ride up to the second observation level: 3000 yen, or US$37.85 at current rates. I am sick of everyone's ignoring the reality that compared to the Burj Al-Khalifa, the Tokyo Sky Tree is a pipsqueak.
Leave it up to the cartoonist at the Tokyo Shimbun to find a new, refreshing angle to look at the opening, one that can make even a grump like me smile:
In the first panel, citizens are looking up with safety glasses at the ring eclipse that appeared in the skies above Tokyo on May 21.
In the second, the people are looking up with cameras, binoculars and the naked eye at the Sky Tree, which opens for business today, May 22.
In the third panel, Prime Minister Noda Yoshihiko remarks to Democratic Party of Japan Secretary-General Koshi'ishi Azuma, "The citizens of Japan have come alive, haven't they?" Koshi'ishi cannot for the life of him understand what has the PM thinking this way.
The hook in this instance is in the title on the left of the panels. It reads:
「２日だけのぅつむかない日々」The hook is the term utsumuku,"to look down," "to keep one's eyes down." The second half of the word, muku, and the images in the first two panels, take the reader on a mental leap to what is probably the best known Japanese song in the English-speaking world, "Sukiyaki" -- the only Japanese-language tune to ever make it into the Top Ten of Billboard's music charts, this in July 1963.
Futsuka dake no utsumukanai hibi.
"Just two days when people are not looking at the ground as they normally do."
The song, by composer Nakamura Hachidai and lyricist Ei Rosuke, was a huge hit for the singer Sakamoto Kyu in 1961. It begins with what is probably the third best known opening line of any Japanese song, after the national anthem and "Sakura, sakura":
上を向いて、歩こう。。。The song, written after the first burst of Japanese economic growth and on the heels of the "doubling of incomes in 10 years" economic strategy announced by Prime Minister Ikeda Hayato, typifies the hopeful attitude of the times.
Ue o muite, aruko...
"Let me be walking, looking up..."
In the song, the young man is trying not to cry but ends up doing so because he is all alone. However, he vows to keep looking up -- just as the whole of the country was, hoping for a better tomorrow.
Here is Sakamoto singing and whistling the song in 1983 (You Tube).
Hence Prime Minister Noda's conclusion, after two straight day of people looking up: "Hey, the hope is back!"
Of course, the song has a tragic coda. Sakamoto died in the JAL 123 air disaster of August 12, 1985 -- still the worst single-plane air accident in history. The 747, crammed with passengers heading home for the Obon holidays, lost its the hydraulic steering system a few minutes after takeoff, becoming a veering, swerving uncontrolled mass of terror. After 44 minutes of out-of-control flight, the plane plowed into a mountainside in Gunma Prefecture, killing 520 passengers and crew.
Friday, February 22, 2008
Disgorging their GUTs...
...or should they be called GUTOEWWNs--"Grand Unified Theories of Everything Wrong With Nippon"?
Next week's The Economist tries to get it all down.
Poor Philippe Pons tried the same in Le Monde last week, in a much more compressed format.
Documenting the infuriating incapacity of the country to seize upon its advantages possibly defeats all language. An island of liberty floating in an illiberal sea, a state with an obedient yet forward-thinking populace, a pleasant environment, social stability at home and a low cost international security arrangement--how can the Japanese not succeed?
Some hints...some guesses...
When
a) Japan is an elective parliamentary democracy, and
b) 25% of Japan's parliamentarians represent people who no longer exist
you will have problems.
When
a) a generation is taught (work hard) + (sacrifice) + (show deference to authority) = a peaceful, successful life (honestly, it's guaranteed!) and
b) the members of this generation are now in charge of the country's boardrooms, schools & universities, government & quasi-government offices, and
c) they are the most numerous generation Japan will ever know
you will have problems.
For democracy to function properly, those occupying seats in the parliament must represent the people--because believe-it-or-not (and damn few of the supposed elites in Tokyo do) the people are not stupid (see the conclusion of the Economist article on this point).
For companies and the state to perform their functions effectively, executives and government leaders need to flush from their systems this crippling nostalgia for the late 1950s and 1960s--when everything was supposedly "getting better all the time." In truth, it was getting worse--the air, the water, the political corruption, the competition of ideologies...all decayed or were buried. Revival and salvation came in the 70s and 80s when those far from the levers of power learned to shame their betters into working on behalf of the common citizen.
Nostalgia, however, lingers on, even when all else is lost...
------------------------------------
Demolished home in Shinjuku 5-chōme with poster of Ishihara Yūjirō
Shinjuku Ward, Tokyo Metropolitan District
February 22, 2008
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