'Abenomics' kicking average wage-earner in teeth
Japan is “an exporting country” – that has been said so many times by so many commentators that it seems like the truth, but in fact, notes Shukan Post (Feb 8), it is very much an importing country as well, a fact it says makes “Abenomics” “the salaryman’s hell.”
“Abenomics” is the catchphrase that has stuck to the package of economic policies pursued with such vigor by Prime Minister Shinzo Abe. It amounts to massive government spending of borrowed money. Some experts are horrified by Japan’s mounting debt and Abe’s single-minded reliance on an approach that jump-started the postwar economy but proved helpless to stem the decline that set in in the 1990s. Other exerts insist it is the only way to get the nation moving again.
Is what’s good for the major exporters necessarily good for the country as a whole? Shukan Post looks at the issue from the point of view of the average wage earner – who, it says, will face on a stagnant income soaring prices in everything from fast food to computer equipment, housing loans to soapland entertainment.
The reason, reduced to a single word, is imports. Japan exports cars and electronics but it imports food, clothing and, above all, energy. A corollary of Abenomics is a cheap yen – excellent for exporters, a nightmare for importers. Consider the pump price of gas – 145 yen per liter at 90 yen to the dollar, 156 yen per liter at 100 yen to the dollar. Figuring a 30-liter tank, that’s an extra 300 yen every time you fill up.
Fast-food meals are a company employee’s staple. Especially popular is gyudon – beef on rice served in a bowl, offered by typical chain outlets for under 300 yen. The beef is imported; so, of course, is the fuel that heats and lights the restaurant and powers its stoves. The same yen decline from 90 to 100 to the dollar, analysts calculate, will drive the price of a serving of gyudon up 20-30 yen.
That’s pocket change, though it adds up, but the potential impact of Abenomics on housing loans is big money, weighed against average salaries. Abenomics, with its targeted inflation of 2%, will drive up interest rates. An average salaryman homeowner is saddled with a 30 million yen home loan, repayable over 35 years. Rising interest rates will bloat monthly repayments and play havoc with the household budget. And how would it help the economy in the long run if it stifles spending even further?
Shukan Post’s introduction of soaplands at this point lightens the tone but not the substance of its argument. The erotic entertainment these establishments offer involves bathing. Bath water is heated by imported fuel. Moreover, if the yen sent home to families by foreign erotic entertainers goes less far than it used to, the women will leave, abandoning the field to Japanese women who typically charge more. In short, in Shukan Post’s view, Abenomics may produce fine macro-economic indicators, but not without kicking the average company wage-earner in the teeth every way he or she turns.