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Consider Japan

Chapter IV

Living Standards

For the foreign observer who wants to assess living standards in modern Japan there is a constant clash between two apparently contradictory pieces of evidence. On the one hand, the bare income statistics suggest that this is still a very low income and cheap labour country indeed. The average earnings of the 21 million “regular workers” in non-agricultural industry and commerce are only just over £6 a week (which is still less than half of the average for all workers, male and female, in manufacturing industry in Britain).

On the other hand, the standards of consumption are visibly European rather than Asian; the Japanese are now as well dressed as any people in the world (their figures of textile purchases per head confirm this); they have broken right through into the revolution of consumer durables; and each afternoon their wives throng the world’s biggest and most crowded department stores in the large cities, where prices are not all that far below European levels, but where business goes humming along. More surprisingly still to this observer, the farmers in the fields along the main railway tracks, who a few years ago would have manhandled their own barrows to market, can be seen using modern and shiny power-driven equipment. The average farm household’s income in 1961 was estimated at £450 a year, admittedly with an average of 5.6 family members per farm, and with nearly half the income coming from earnings of some family member who has taken a job (sometimes whole time. sometimes only at the farm’s slack period) outside farming. Only in two respects – its working hours and its housing standards – does Japan look Asian; the average Japanese works a 48-hour, five-and-a-half day, week even in big industry (in small industry and distribution, considerably longer) before going home to live with his wife and children and probably his parents in two or three rooms. Because of this habit of clustering together, the average household in Tokyo in 1961 had 4½ members (1½ of them earning), and an average cash income of £12 to £13 a week.

The explanations of the apparent paradox between income statistics and high consumption of luxury goods rest partly on the economics secured by this clustering together, and partly on the facts that:

(1) The bare figures of industrial wage and salary levels are misleading because Japan is the country par excellence of fringe benefits – and expense accounts. Apart from family allowances and the big cash bonuses at Christmas and midsummer (which are included in the household incomes and average wage figures mentioned above), these fringe benefits include, payment of the employees’ travel expenses to and from work, and (in the big firms) free accommodation for bachelor and spinster workers, subsidised houses for some married workers, and lavish sporting facilities and holiday rest homes. On average, these non-cash fringe benefits are said to cost employers more than £50 per worker per year; but one’s guess is that this is an underestimate, because both sides regard the granting of certain fringe benefits as a matter of course.

(2) The statistics for average wages are depressed by the fact that the average woman’s wage is only between a third and a half of a man’s, and that the average youngster in his early twenties – unless he draws family allowances from a big firm – is entitled to get less than half of the income of a man in his forties or fifties. (Usually his pay will go up by about 5 per cent a year.) This last point is a very important factor in keeping average wages low at the moment, because the average age of the workers in the big and new and highest paying plants is at present very young indeed (about 25 in some cases). But even on the basis of present wage rates, it is clear that Japanese employers’ wage bills are gradually going to be inflated quite considerably as (a) the average age of the working force grows older; as (b) women leave earlier to get married; and as (c) the retirement age for men is pushed beyond the present figure of 55 (which is a hangover from the days, only twelve years ago, when that was also the average age at death; it looks cruelly low, and is bitterly resented, now).

The system of pay rising by seniority has some appalling effects on Japan’s employment structure (the way in which it makes Japanese employers eager to recruit their new labour from school leavers only was discussed in the last chapter). But it also means that the worker’s pay reaches its height just when what ought to be his family responsibilities reach their height too. The relatively low wages for teenagers and high wages for teenagers’ fathers, combined with the great importance attached to educational attainments in getting one’s first foot on the ladder of what is to be one’s lifetime job, help to explain the fact that 60 per cent of Japanese children now stay on at school past the permissible leaving age of 15.