What were the social impacts of the lost decade?

February 26, 2009 8:00 PM

What were the social impacts of the lost decade in Japan? Yes, I know economists are all about growth-growth-growth and if you don't have it you're a failure. But what were the actual impacts on levels of personal happiness and satisfaction?

Everyone is wringing their hands about the possibility of an American and/or global "Lost Decade". Is that really something to worry about?

Yes, I know that people will lose their jobs, companies will go out of business, and fewer people will be buying large cars, flat screen TVs, and McMansions. It may be a little while longer until you get your MacBook Air.

But setting aside the GDP and material-wealth-related numbers, what actually happened in Japan during the lost decade? What happened to the people? Did depression, suicide and divorce rates go up? How about hunger, child mortality, violent crime? Life expectancy? Copulation rates? (I guess economists probably don't track copulation rates, but I wish they did.)

I ask because all the discussion of a possible long-term slump paint it as a priori disastrous and undesirable. But it strikes me that there could also some positives, for example in helping slow the rate of carbon emissions. I've read that people also tend to be healthier during recessions, as well.

posted by alms to society & culture (18 comments total)

The phenomena of freeters and NEETs have plagued Japan for years now. Suicide is a problem. Many people who came of age in the "lost decade" have found themselves unemployable; corporations would rather hire a new graduate than someone in their early thirties who has never had a full-time job. Of course, this means that those people can't form families or households. Here is one article from BusinessWeek about this phenomenon.

You might also look at the suicide rates in eastern Europe.
posted by sonic meat machine at 8:35 PM on February 26

what actually happened in Japan during the lost decade?

I lived in Tokyo 1992-2000 so have some perspective here.

It was a slow motion trainwreck from where I was.

Banks that were around in 1992 got merged into other banks, and by around 2002 the financial landscape was zuibun kawatta (totally changed).

The first 3 years (1992-1995) was teaching English. That market where students were required to take out $6000 loans to pre-pay their 2 year courses was a dead business model going into the internet era (plus they changed the rules allowing students to get pro-rated refunds around 1998 I guess). The school I worked at finally went BK in 2006 IIRC.

During the latter half of the decade I worked for a very small startup doing 3D simulations programming. From there I saw the effects of collapsing land prices first-hand, we were on the 8th floor of a very nice late Showa building with the owner living on the top (9th) floor. The owner was totally screwed though since half or more of his building was unrentable at break-even rents.

I guess our company survived via loans from Fuji Bank and a slow stream of government "stimulus" projects farmed out to major corporations like Kawasaki and Quasi-Governmental science-related organizations to manage.

Basically the entire country went nuts in the late 80s investing in real estate and stocks, driving both up to parabolic peaks of unreality.

Financial stress is a #1 cause of suicide. In Japan this is done stepping in front of an express train or jumping off a building. With downsizing, 30-40-50 year olds would get released from their jobs and either become homeless non-providers or taxi drivers.

The Shakin ("Payday Lenders" basically) industry also flourished with their 35% - 100++% APRs. This heightened the squeeze on desparate people.

But I went back in 2002 and things seemed a bit better then. Certainly there had been a LOT of development around Tokyo over the past 10 years.

I suspect things out in the sticks are a lot different than Tokyo and the major pop centers, though. The countryside population loses youth to the cities, and the cities lose youth to Osaka and Tokyo. The edge of decay and economic hopelessness is a little more visible out in the sticks.

But there is also something of a labor shortage. Japan, like England, is a nation of shopkeepers. It is possible to make $10/hr if you can tend a register there, and seemingly millions of people do. Other make-work is security guards and traffic guides, where probably another million people find enough work to at least live with their parents.

The Japanese still maintain a stupendously high standard of living for the most part, though. Running an export economy has its perks.
posted by troy at 8:53 PM on February 26 [5 favorites has favorites]

oh, I forgot the MAIN economic effect of the lost decade in Japan -- women college graduates were generally totally frozen out of corporate hiring.

In the 80s the Japanese needed bodies for their burgeoning IT work and hired people left and right for computer and office work, but in the 90s the impression I got was that it was totally futile for any recent college-graduate woman to go out on the shushoku (job search) campaign.
posted by troy at 8:59 PM on February 26

If you just want some raw data to sift through, here are some pdfs from Japan's Foreign Press Center, or you could look through the Statistics Bureau's site.

To add onto the previous comments, it's tricky making comparisons to Japan's business market during the recession and the current US situation. Japan's old tradition of life-long employment is still the dominant system in Japanese business, and is one of the main obstacles for younger people trying to change or get back into careers after any period of unemployment in Japan. The US doesn't have that problem since it is socially/professionally acceptable in many fields to change careers, or go back to school for a different degree, etc.
posted by p3t3 at 9:29 PM on February 26

I lived in rural Japan from 1994 to 2004.

This Mutant Frog post illustrates the change that occurred in Japan over the past twenty years.

I read somewhere else that the current cohort of twenty-somethings have never known the extravagant days of the Bubble.

Japanese consumers used to like to spend, but now it's all about thrift. Uniqlo (a discount clothes store in Japan kind of like the Gap, but cheaper) is weathering the current meltdown quite well.

Car ownership is starting to decline. Personal computer and laptop purchases have been declining for the past five years or so (people prefer to use cell phones).

Because of deflation, real wages have remained stagnant for almost twenty years.

Women have been affected quite a bit. For example, an admin position pays the equivalent of $1,200 a month after taxes.

You can't live on $1,200, so many young women live at home with their parents.

People are not getting married anymore, and so these young women continue to live with their parents well into their 30s and 40s.

A lot of these young women end up caring for their parents as the parents age.

This is a genuine trend in Japan.

I think another effect of the prolonged slump is that many women are forced into the sex trade - porn and prostitution. I was back home in Japan last summer, and my cousin took me to a bar. The bar girls were all from the area. One of them was my former student, back when I taught junior high. It was strange having her sit on my lap. While not prostitution, it was depressing to think this was the only thing this girl could do.

Japan is known as a "mono-tsukuri" culture. Japanese people make things like hardware (electronics) and cars. But they can't design software. Japanese, as a rule, are also not encouraged to be entrepreneurial. There is no culture of startups. If you want to do business development, you join an organization and someone might tell you to make deals.

However, for the people that can figure out software (Cyber Agent) or sales (Rakuten), well, you've got it made.

These people are the "katchi-gumi" (the winners in today's economy). The other people, the ones who are forced to work as contract, temp labour at an auto-parts factory, are the "make-gumi", or the losers. Newly-coined words that my wife hates, but, nonetheless, apt descriptions of Japan today. It didn't used to be like this.
posted by KokuRyu at 9:41 PM on February 26 [2 favorites has favorites]

troy wrote:
I suspect things out in the sticks are a lot different than Tokyo and the major pop centers, though. The countryside population loses youth to the cities, and the cities lose youth to Osaka and Tokyo.

I was teaching English in the sticks of Kyushu last year.

I attended a handful of schools and the teachers who had been in the district for a long time said that most of those schools had 3-4 times as many students 15-20 years ago as they do now (one school of 200 used to have 800, another of 60 used to have 150). It was sometimes eerie walking around a half empty school (especially because they keep the hallway lights off to save electricity).

Anyways, the communities are still getting by alright, but there has been a lot of re-districting and combining of small towns. The ratio of old to young people has to be really depressing for the few young people left there though.
posted by p3t3 at 9:54 PM on February 26

p3t3 -- there were 10M high-school age kids in Japan in 1990 (this was the baby boom echo generation), now there's ~6M, and this will continue to decline to 4M or so by 2050, according to this at least.

This makes my plan of eventually retiring to Hagi or some other nice coastal spot interesting to me.

All I need is an am/pm and amazon.co.jp delivery, LOL.
posted by troy at 9:59 PM on February 26

To echo a lot of others, thrift is definitely commonly practiced in Japan, where it certainly didn't used to be. The CEO of Uniqlo, evidently, is the richest person in Japan. 100 yen shops are everywhere now, because people realized they needed to be able to buy usable everyday goods for less than $10.

No one buys anything, either. This is the worst part, the deflation aspect. Everyone is waiting for things to bottom out, causing things to fall further down. Japan has to be an export economy, as there isn't enough domestic demand. Some areas that had been booming were left with gaping holes until the economy began to pick up again, the example that most easily comes to mind is the Makuhari Messe area, where, surrounded by new buildings and shops, there was, essentially, a vacant lot for nearly ten or fifteen years, simply because the owner of the lot couldn't afford to build anything there, nor could they afford to sell it. It only recently became a furniture center that is, as we speak, dying, because no one can afford to buy expensive furniture right now.

Foreign brands made some inroads, as well. I mean the cheap, discount stuff. Ikea is booming here, as is Costco. Carrefour got here, but then couldn't figure out the market, and is on its way out.

Young people have little to no hope for their future. Something like 50% of the workforce under 30 is temporary or part-time, and in a culture based on seniority, my university students future seems pretty bleak. In some ways, though, the lack of possibilities has given some people a kind of freedom, and there are a lot of pretty interesting art/subculture groups that have sprung up. I imagine not having a viable alternative involving substantial income makes people more willing to take risks.

The biggest problem is the parasite singles culture that has sprung up, not only among women, as Kokuryu mentions. You have an entire generation of young people, unable to find gainful employment, who are still living at home, and off of mom and dad's money. Traditionally, the parents in Japan would help their children get ready for their solo life, paying for marriages, helping with downpayments on new housing, a whole bunch of things. I have a feeling that's all going to go away. Children are burning through their parents savings, yet they're unable to start their own savings. I think it's quite likely that a traditionally savings oriented culture could very well end up being a debt/credit oriented culture (like the States) within a generation or two.

And, as KokuRyu mentions, there are the new "winner tribe" and "loser tribe" and that's something that really didn't used to exist. People weren't fantasticly rich or poor, and that's no longer the case. The disturbing thing is that those phrases were coined by former PM Koizumi, and it seemed like he was saying that the split of haves and haves not was a good thing.
posted by Ghidorah at 10:00 PM on February 26 [2 favorites has favorites]

And, in regards to violent crime, yes. In the past 9 years since I've gotten here, it seems that not only is violent crime more common, it has, in some ways, become more gruesome/senseless/brutal. That's in 9 years. You have the Akihabara stabbing spree, a brother killing his sister because she was teasing him, then dismembering the body, children being beaten to death by parents/parent's partners. Hell, a homeless man was beaten to death a couple months ago by a supermarket manager for stealing a can of chu-hi. It's still one of the safest countries in the world, but it's become less so.
posted by Ghidorah at 10:08 PM on February 26

All of the comments on here are pretty solid, so I'll just toss this in: the hikikomori. It's a Japanese term that refers to mostly men who spend their entire lives in their rooms, often in their parents' homes. These people generally do this because they feel so pressured by Japanese society that they simply cannot face their peers, so they turn inwards and hide themselves away from the world.

There are a bunch of theories about the hikikomori phenomenon, but one of them is that they are a result of Japan's economic downturn. Read "Shutting Out the Sun" for more on the topic. It's a really fascinating book.
posted by gchucky at 10:24 PM on February 26

Ghidorah, the murder rate in Japan has been decreasing, not increasing. However, the way that murders are covered in the press has changed with mainstream newspapers printing grisly details that would have been left to the tabloids before.

Sometimes it felt like everyday there was another story about husbands driving their families off cliffs, mothers strangling their kids, or teenagers mutilating their mothers, but aside from those bizarre incidents, there were very few violent crimes.
posted by betweenthebars at 11:26 PM on February 26

In some ways, though, the lack of possibilities has given some people a kind of freedom, and there are a lot of pretty interesting art/subculture groups that have sprung up.

I agree with this. Japan these days is a much more pleasant place to live than it was in the nineties - less self-satisfied, much more open, and even little things like it being easier to live cheaply have made a big difference. As far as careers, a lot of Japan's old corporate assumptions were pretty pernicious, and paradoxically people have more choices now the career-for-life thing is not obligatory.

I agree with the poster above that Japan is not neccessarily comparable to the US though. It's a very different culture, with a very different set of problems/solutions.
posted by dydecker at 4:26 AM on February 27

Thanks. This is just the perspective I was looking for.

As I read these comments, the thing that stands out the most is all of the long-term negative consequences of high unemployment rates. When people can't find jobs the entire trajectory of their lives change in negative ways. Also, people who are lower on the social ladder (in the case of these examples, women) get pushed out of the job market first.

Andrew Sullivan posted a letter from a 3rd year law student who sees no prospect for employment upon graduation:

Basically, everything we’ve dreamed of and been promised by our advisers/professors is no longer available.

Job offers already accepted have pushed their starting dates back from September to January. Students are receiving surprise rejections for bar study loans, and I know a few who literally cannot afford the bar exam application fee ($820) because of it, let alone the bar prep courses...
[I] am finding that there are literally no entry-level positions available, even for students from highly-ranked schools such as BC and BU...

I fully expect to have nothing lined up when I finish the bar exam at the end of July. The thought of having nothing, absolutely nothing, to do on August 1st petrifies me... I’ll have over $130K in debt from my law degree... I’m 26 years old, and am frightened to death I will have to move back to Ohio and away from my gay community, and live with my parents. With a law degree. I feel like a chump sometimes.

That does seem truly frightening.
posted by alms at 9:03 AM on February 27 [1 favorite has favorites]

It's also worth remembering that the educational system in Japan is structured in such a way as to prepare students for the workforce, and the path on which students travel is often decided fairly early on in life. If a bright, hard-working student decides to follow the path of study like hell -> enter good high school -> enter good university -> get guaranteed good job, what becomes of them if they reach adulthood just as the economy goes south?

They've just spent nearly their entire life studying and following the rules for the promise of a good job that no longer exists. The bad economy and poor job outlook requires that they be flexible and/or willing to take risks in order to succeed, but flexibility and risk taking is something they have little experience with. So, you have a generation that doesn't quite know how to respond to the challenges they face - hence (in my opinion), the increase in the number of "stuck in place" NEETs, parasite singles and hikikomori in Japan.

Here in the United States, however, the generation currently reaching adulthood has had a different experience. Flexibility and a willingness to take on risk practically defines them. And the American market is much better suited to rewarding such behavior than the Japanese market. So, for the younger generation, at least, the impacts of the current economic crisis might not be quite so severe or debilitating compared to Japan.
posted by jal0021 at 1:56 PM on February 27

betweenthebars, thanks, I didn't know that the murder rate had dropped. It might well be more tabloid style reporting, but it certainly seems more grim. I'm not sure how long ago it started, but I would say a large percentage of people here are afraid of young people (especially high school boys), largely due to examples in recent years of an older person commenting (probably in an overbearing manner) on rude behavior by younger people, then the old guy getting the shit beaten out of him, or in a couple cases, killed. The thing is, twenty, thrity years ago, it wouldn't be out of place in Japanese society to reprimand someone for obnoxious behavior. That's totally changed, and while the politeness level here is still pretty freakishly high, it feels like everyday manners and politeness have died an ugly death. The shit my university students do on a daily basis...

I think that's one of the lingering effects, to be honest. Kids these days...
posted by Ghidorah at 5:58 AM on February 28

But they can't design software.

Striking. Any thoughts as to why not?
posted by IndigoJones at 7:40 AM on February 28

It might well be more tabloid style reporting, but it certainly seems more grim.

125 million people live in Japan, yet, if it bleeds it leads. As well, there is tremendous concentration of media ownership in Japan. And that media is located in Tokyo, a megacity of 15 million people. There's bound to be noteworthy criminal/antisocial activity in a cohort that big.

So, every time there is a scuffle in Ikebukuro or whatever, the Tokyo media picks it up and broadcasts it to the nation. As well, since if it bleeds it leads, the national broadcasters are always quick to pick up a story from a regional affiliate. That's why a kid left in a hot car in Saga while the parents play pachinko becomes such big news across the nation.
posted by KokuRyu at 7:51 PM on February 28

> But they can't design software.

Striking. Any thoughts as to why not?

I have no idea. So people claim it's because software engineers don't get paid very much in Japan. I personally believe it's because there is no culture of entrepreneuralism in Japan. You can start a clothing store or a restaurant, perhaps, but it's more difficult to start up a niche software development company.
posted by KokuRyu at 7:57 PM on February 28